In the world of public finance, Orange County, California, has long had an unfortunate distinction: In 1994, the county filed the largest municipal bankruptcy declaration in history, seeking court assistance to restructure $1.7 billion in debt.
This month, however, Orange County finally lost its dubious claim to fame.
On November 9, political leaders in Jefferson County, Alabama — home of Birmingham, the state’s largest city — asked a federal bankruptcy court to help the county restructure debt of more than $4 billion. The county’s debt burden stems from a disastrous investment in a local sewer system and amounts to nearly $7,000 for each of the 658,000 men, women and children who call the county home. That a bankruptcy declaration of such magnitude is possible has raised alarms nationally over whether more municipal crises may be on the way.
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I'd rather have bankruptcy then bailouts. With a bankruptcy, all union contracts are null/void. With a bailout, you're forced to negotiate even if it's in the municipalities best interest to cancel the contract. It's how it should be done, a bailout just creates dependency.
ReplyDeleteComing to a Salisbury near you, courtesy of Mayor Jim Ireton!
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