Even to the casual observer, the financial condition of government budgets are under severe stress. Taxes have gone up consistently and have outpaced any meager adjustments in income for most taxpayers. No one can reasonably expect that municipal financing is assured by simply raising assessments and rates to keep their bloated bureaucracies solvent. Since the middle class has never recovered from the money centered meltdown, the average community struggles with diminished resources. Add into this equation the prospects of an even worse financial collapse, the question needs to be asked, just how municipal jurisdictions will cope with the reality that even more properties will go off the tax rolls.
A measure of last resort might well be bankruptcy, assuming your state allows for such relief. Chapter 9 – Bankruptcy Basics seem straight forward. “The purpose of chapter 9 is to provide a financially-distressed municipality protection from its creditors while it develops and negotiates a plan for adjusting its debts. Reorganization of the debts of a municipality is typically accomplished either by extending debt maturities, reducing the amount of principal or interest, or refinancing the debt by obtaining a new loan.”
The resources on Bankrupt Cities, Municipalities List and Map, provides valuable information.
Overall bankrupt municipalities remain extremely rare. A Governing analysis estimated only one of every 1,668 eligible general-purpose local governments (0.06 percent) filed for bankruptcy protection from 2008 through 2012. Excluding filings later dismissed, only one of every 2,710 eligible localities (not all states permit governments to file for bankruptcy) filed since 2008.
List of Bankruptcy Filings Since January 1, 2010
All Municipal Bankruptcy Filings: 51
General-Purpose Local Government Bankruptcy Filings (9):
— City of Hillview, Ky.
— City of Detroit, Mich.
— City of San Bernardino, Calif.
— Town of Mammoth Lakes, Calf. (Dismissed)
— City of Stockton, Calif.
— Jefferson County, Ala.
— City of Harrisburg, Pa. (Dismissed)
— City of Central Falls, R.I.
— Boise County, Idaho (Dismissed)
Most financial analysis does not forecast that:
TIME TO RETURN TO A BANKING SYSTEM THAT SERVES THE PEOPLE AND NOT GREED & WARS!
State public banks, an old American tradition, may provide an important tool to pull states out of the current economic slump. The concept is simple: The public bank uses state funds on deposit as bank reserves for making loans for infrastructure and other projects to Improve the state’s economy and grow jobs. Ben Franklin argued that colonial Pennsylvania’s public bank was the key to the colony’s 18th century prosperity. North Dakota, whose public bank has operated since 1919, boasts the lowest unemployment rate in the country and is the only state to have a balanced budget in each of the last three years.
In this video we highlight the research and efforts of Ellen Brown, the author of “Web of Debt” and others at the Public Banking Institute. Ellen was a guest on our radio show, In Context which is archived at our website, www.incontextreport.com. For more information on the public banking institute see their website at PublicBankingInstitute.org.
State Banks to Challenge Wall Street Money Monopoly with Ellen Brown
Many people feel used and cheated by big banks. Since checking accounts are nearly a necessity in modern life, most people do business with the corporations. Vermonters for a New Economy, an advocacy group in the Green Mountain State have another idea. Now, 15 towns have voted to join their calls for a state-run bank. A century ago, the Bank of North Dakota was established. That institution provides loans a affordable rates, and has been among the most secure of all financial groups. According to the advocacy group, “the State of Vermont would deposit its revenues into the state bank. The bank would use these funds in ways that would create economic sustainability… [by making]… loans and engaging in other activities… to promote economic well-being in the state.
The interest from these loans would be returned to the bank instead of out of state interests and would be available for further investment in the local economy.” But would such a plan work in Vermont? And could an institution formed today be able to avoid corporate influence? Ellen Brown is an attorney who has spent years researching global financial systems. She is also an author, penning Web of Debt and The Public Bank Solution. In these works, she writes about the influence of mega-corporations on the banking industry. Brown is our guest on the show today. We will talk about the state of banking today, as well as the powers behind the industry. We will discuss the rise of public banking, and the events in the Green Mountain State.