March 10, 2012

NEVER WASTE A CRISIS:

Deficits Push N.Y. Cities and Counties to Desperation (DANNY HAKIM, 3/11/12, NY Times)

Even as there are glimmers of a national economic recovery, cities and counties increasingly find themselves in the middle of a financial crisis. The problems are spreading as municipalities face a toxic mix of stresses that has been brewing for years, including soaring pension, Medicaid and retiree health care costs. And many have exhausted creative accounting maneuvers and one-time spending cuts or revenue-raisers to bail themselves out.

The problem has national echoes: Stockton, Calif., a city of almost 300,000, is teetering on the verge of bankruptcy. Jefferson County, Ala., made the biggest Chapter 9 bankruptcy filing in history in November and stopped paying its bondholders. In Rhode Island, the city of Central Falls declared bankruptcy last year, and the mayor of Providence, the state capital, has said his city is at risk as its money runs out.

New York City's annual pension contributions have increased to $8 billion from $1.5 billion over the past decade.

"We really are up against it," Mayor Michael R. Bloomberg said during a recent trip to Albany, urging the state to reduce pension benefits for future public employees. In a radio interview on Friday, Mr. Bloomberg noted the spreading financial woes of local governments, saying, "Towns and counties across the state are starting to have to make the real choices -- fewer cops, fewer firefighters, slower ambulance response, less teachers in front of the classroom."

The measure of whether it's a real crisis is whether they reform those retirement and health programs and cut jobs, no?

Posted by at March 10, 2012 5:00 PM
  

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