Harrisburg, PA files for bankruptcy

[Coronita]

Another city bites the dust…

http://finance.yahoo.com/blogs/daily-ticker/harrisburg-pa-files-bankruptcy-meredith-whitney-181406765.html?sec=topStories&pos=9&asset=&ccode=

[briansd1]

better to file for bankruptcy to clear out the debts than to make the citizens pay more for reduced services.

[DataAgent]

Bye bye pension obligations.

[Coronita]

[quote=DataAgent]Bye bye pension obligations.[/quote]

don’t be so sure about that 🙁

[sdrealtor]

FWIW was watching CNBC this morning and this is a one issue bankruptcy. Appararently the state of PA burdened the state capital with some major project that had massive problems. They have been and can meet all other obligations and this appears to be a strategic default to get the state to bail the city out of the problem they forced upon them. At least that is what the city controller was saying in so many words.

[desmond]

The Harrisburgh City Council put this burden on the city, the state of PA did not force them to do it:

Unfortunately, the Harrisburg Authority and the Mayor are intent on building a new incinerator in its place, rather than pursue recycling and waste reduction as a cleaner, financially-sound, job-producing alternative. On December 31st, 2002, Harrisburg City Council passed Mayor Reed’s 2003 budget, a budget with a $6 million deficit that needs to be balanced by the end of the year. Reed and his Harrisburg Authority hoped to plug this budget hole by having the City Countil vote to guarantee a $125 million bond for the Authority to build a new incinerator. In return for putting more Harrisburg taxpayer money on the line to cover the Authority’s bad credit rating, the Authority would kick back the money needed to balance the City’s budget. Unfortunately, on November 5th, 2003, the City Council agreed to back that bond.

[sdrealtor]

Where is Mayor Reed today/

[Anonymous]

Thank you for providing an interesting topic here. In 1980, brand new rules for municipal bankruptcy were submitted. Since then, 243 specific cities have filed for the security. Harrisburg PA started filing for bankruptcy protection this week. In the courtroom, the mayor of Harrisburg has filed a demand that the bankruptcy be declared unlawful. The fight over the filing is sure to continue for at least a couple weeks. You better check this out: Harrisburg Mayor says bankruptcy filing is not legal. Moreover, by filing for bankruptcy, the city is effectively turning the entire mess over to the courts. When a judge decides the fate of the bankruptcy case, the judge will also effectively be deciding who has standing to make financial and debt decisions for and about the City of Harrisburg.

[EconProf]

Closer to home, it appears that San Diego Unified School District is about to go through a type of bankruptcy, called “insolvency” by the superintendent. Due to state revenue shortfalls (surprise!), combined with promised raises to teachers back when they thought the CA economy would recover, a looming train wreck is approaching. The likely scenario would be a state administrator takes over the budget, the Supt. and Board are relegated to an advisory role, and the administrator starts chopping pay, hours, the school year, personnel, etc. Looks like a type of bankruptcy where painful but necessary cuts are made.

[ctr70]

Like I said before we should be “occupying” city halls and state capitols as well for reduction in pensions to government retirees. We are bankrupting our cities and states just to make a few retirees rich in retirement. I know a guy who retired early from the Fed Government getting $8,000 a month for life off the sweat of the taxpayer. So we should cut our schools, city services, libraries, etc.. down to nothing just so we can pay a few retirees their fat pensions?

Do you know how much cash say a small business owner or private sector worker would have to save to throw off $8k a month for life? Let’s just say they were in a really conservative investment with little risk to the principle that got say 4% return…they would need close to $2.5+million capital in the bank to throw off the eight grand a month! And the tax payer is paying out these $8k/month for life pensions by the thousands for Gov worker retirees!

Why can’t they just save for their own retirements like the private sector has to? Who votes and approves this stuff???

[GH]

I am curios what would happen if they simply abandoned the city charter? If the city is insolvent then in effect if can no longer exist.

At some point those supporting our govt pension system has to acknowledge out of money is out of money.

Already in many municipalities pensions considerably exceed any other aspect of the budget and as revenues continue to plummet things are only going to get worse particularly when you consider it is likely those responsible for approving pensions will continue lavish increases as things get worse.

[briansd1]

Local governments are the Greece of America.

We know from history that local governments are especially corrupt and patronage is a problem.

[sdduuuude]

[quote=ctr70]Like I said before we should be “occupying” city halls [/quote]

OCH. Solidarity, brother.

[EconProf]

The occupy wall street demonstrators like to call themselves the 99 percent. I have read there is a counter group organizing calling themselves the 53 percent. That is the % of Americans who pay income taxes. We are in moral hazard territory when 47% of the voters do not pay income taxes and thus have no incentive to rein in government spending and taxes.

[UCGal]

[quote=EconProf]The occupy wall street demonstrators like to call themselves the 99 percent. I have read there is a counter group organizing calling themselves the 53 percent. That is the % of Americans who pay income taxes. We are in moral hazard territory when 47% of the voters do not pay income taxes and thus have no incentive to rein in government spending and taxes.[/quote]
http://the53.tumblr.com/

Started by Erick Erickson of RedState.com

[Author]

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