Municipal Bonds are failing, Merideth Whitney has been right all along. Unions, Civil Service Salaries – Pensions are destroying Cities, Counties, and States, not to mention the federal government.
UPDATED: July 18, 2013
Many local governments across the U.S. face steep budget deficits as they struggle to pay off debts accumulated over a number of years. As a last resort, some filed for bankruptcy.
Governing is tracking the issue, and will update this page as more municipalities seek bankruptcy protection.
Most recently, Detroit became the largest municipality in U.S. history to file for bankruptcy. The state had already appointed an emergency financial manager for the city, saddled with debts totaling an estimated $18 billion.
Overall, though, 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 over the past five years. Excluding filings later dismissed, only one of every 2,710 eligible localities filed since 2008.
The majority of filings have not been submitted by bankrupt cities, but rather lesser-known utility authorities and other narrowly-defined special districts throughout the country.
