Cities in Debt Turn to States, Adding Strain

[groovedaddy]

Harrisburg, the capital of Pennsylvania, dodged financial disaster last month by getting money from the state to make a payment to its bondholders. It did so even though the state warned that the money had to be used for city workers’ pensions.

Now Harrisburg is calling on the state again. On Friday, the city said it could not meet its next payroll without money from the state’s distressed cities program.

Across the country, a growing number of towns, cities and other local governments are seeking refuge in similar havens that many states provide as alternatives to federal bankruptcy court. Pennsylvania will have 20 cities and smaller communities in its distressed-cities program if Harrisburg receives approval. Michigan has 37 in its program; New Jersey has seven; Illinois, Rhode Island and California each have at least one. This is on top of troubled housing, power and hospital authorities.

The increasingly common pleas for state assistance — after two relatively quiet decades — reflect the yawning local budget deficits that have appeared in the last two years.

http://www.nytimes.com/2010/10/05/business/05cities.html?th&emc=th

[BrklynLiberal]

1. duh...Where did the idiots who call for more and more fed tax cuts think the

state, city and local folks are going to get the money to pay the bills??????????????

Less fed money = more local taxes..........or a lot fewer services.....You make your choice and then you gotta live with it...

You simply cannot have your cake and eat it too...but no one wants to be the bearer of such serious tidings...