SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
Roger Leonard, a heavy equipment operator for the city of Scranton, Pa., saw his pay plunge to $340 from about $900 for two weeks' work after the mayor cut city-employee pay to minimum wage. (Jeff Brady/NPR)
Hard Times, USA: Cities and Workers Driven to Brink by Austerity
Jul 11, 2012
Municipal workers in Scranton, Pennsylvania have filed federal lawsuits after the mayor cut all city employee's pay to $7.25 an hour, the state's minimum wage.
San Bernadino, California, meanwhile, became the third city in California this year to declare bankruptcy.
The city of North Las Vegas, Nevada declared a financial state of emergency beginning July 1st, an authority usually reserved for natural disasters like floods or fires. In this case, the declaration was used to justify cutting town labor costs following a projected budget deficit of $30.9 million for the 2012-2013 fiscal year.
Each town or city that faces financial crises has its own story to tell, but taken together, these stories spin a narrative about the American economic landscape that is impossible to ignore.
The financial crisis of 2008 -- which started in the housing sector -- has continued to spread to municipalities as tax revenues remain depressed and high unemployment numbers endure. Federal assistance has dried up as Washington lawmakers from both parties reside in gridlock and election year inertia make short-term relief unlikely.
As a recent story in The Independent notes, "Fears over civic bankruptcies stretch back to December 2011, when a high-profile Wall Street analyst called Meredith Whitney caused an overnight panic in the municipal bond market, which underpins America's public fortunes, by telling the TV news show 60 Minutes that she believed that there were going to be '50 to 100 sizeable defaults' by debt-ridden cities in the not-too-distant future."
Since 2007, a series of small cities - from Westfall in Pennsylvania, to Moffett in Oklahoma, and Prichard in Alabama - have found themselves in court declaring "Chapter Nine," the part of the US bankruptcy code applicable to municipalities.
City governments -- many who had been pressured to invest in complex financial instruments that promised safe returns but turned out to based on the same risky products that caused the collapse of the credit markets -- saw costs soar just as their revenues collapsed and as many of their citizens demanded more assistance than ever.
A sampling of US towns left in financial ruin (via The Indepenent):
Stockton, California
The biggest city in the US to run out of money so far, it listed a debt of $1bn in its bankruptcy application last month
Mammoth Lakes, California
The ski town filed for bankruptcy this week after losing a legal fight costing twice its annual budget
West Fall, Pennsylvania
The economy was doing well in this small town yet its $20m debt still proved too big for it to cope with
Jefferson County, Alabama
Failure to restructure $3.1bn bonds on its sewers sent its finances down the drain
Central Falls, Rhode Island
Went broke last year due to its massive pension bill for the baby boomers among its 18,000 citizens
Vallejo, California
Debt led to police officers being laid off, fire stations being closed, and cuts imposed on other services in 2008
Moffett, Oklahoma
Raised 78 per cent of its income from speeding tickets - until a state-imposed ban on the fines made it insolvent in 2008
Pritchard, Alabama
When town ran out of money for pensions in 2009, it simply stopped paying them, but that was not enough
# # #
Why Your Ongoing Support Is Essential
Donald Trump’s attacks on democracy, justice, and a free press are escalating — putting everything we stand for at risk. We believe a better world is possible, but we can’t get there without your support. Common Dreams stands apart. We answer only to you — our readers, activists, and changemakers — not to billionaires or corporations. Our independence allows us to cover the vital stories that others won’t, spotlighting movements for peace, equality, and human rights. Right now, our work faces unprecedented challenges. Misinformation is spreading, journalists are under attack, and financial pressures are mounting. As a reader-supported, nonprofit newsroom, your support is crucial to keep this journalism alive. Whatever you can give — $10, $25, or $100 — helps us stay strong and responsive when the world needs us most. Together, we’ll continue to build the independent, courageous journalism our movement relies on. Thank you for being part of this community. |
Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Municipal workers in Scranton, Pennsylvania have filed federal lawsuits after the mayor cut all city employee's pay to $7.25 an hour, the state's minimum wage.
San Bernadino, California, meanwhile, became the third city in California this year to declare bankruptcy.
The city of North Las Vegas, Nevada declared a financial state of emergency beginning July 1st, an authority usually reserved for natural disasters like floods or fires. In this case, the declaration was used to justify cutting town labor costs following a projected budget deficit of $30.9 million for the 2012-2013 fiscal year.
Each town or city that faces financial crises has its own story to tell, but taken together, these stories spin a narrative about the American economic landscape that is impossible to ignore.
The financial crisis of 2008 -- which started in the housing sector -- has continued to spread to municipalities as tax revenues remain depressed and high unemployment numbers endure. Federal assistance has dried up as Washington lawmakers from both parties reside in gridlock and election year inertia make short-term relief unlikely.
As a recent story in The Independent notes, "Fears over civic bankruptcies stretch back to December 2011, when a high-profile Wall Street analyst called Meredith Whitney caused an overnight panic in the municipal bond market, which underpins America's public fortunes, by telling the TV news show 60 Minutes that she believed that there were going to be '50 to 100 sizeable defaults' by debt-ridden cities in the not-too-distant future."
Since 2007, a series of small cities - from Westfall in Pennsylvania, to Moffett in Oklahoma, and Prichard in Alabama - have found themselves in court declaring "Chapter Nine," the part of the US bankruptcy code applicable to municipalities.
City governments -- many who had been pressured to invest in complex financial instruments that promised safe returns but turned out to based on the same risky products that caused the collapse of the credit markets -- saw costs soar just as their revenues collapsed and as many of their citizens demanded more assistance than ever.
A sampling of US towns left in financial ruin (via The Indepenent):
Stockton, California
The biggest city in the US to run out of money so far, it listed a debt of $1bn in its bankruptcy application last month
Mammoth Lakes, California
The ski town filed for bankruptcy this week after losing a legal fight costing twice its annual budget
West Fall, Pennsylvania
The economy was doing well in this small town yet its $20m debt still proved too big for it to cope with
Jefferson County, Alabama
Failure to restructure $3.1bn bonds on its sewers sent its finances down the drain
Central Falls, Rhode Island
Went broke last year due to its massive pension bill for the baby boomers among its 18,000 citizens
Vallejo, California
Debt led to police officers being laid off, fire stations being closed, and cuts imposed on other services in 2008
Moffett, Oklahoma
Raised 78 per cent of its income from speeding tickets - until a state-imposed ban on the fines made it insolvent in 2008
Pritchard, Alabama
When town ran out of money for pensions in 2009, it simply stopped paying them, but that was not enough
# # #
Municipal workers in Scranton, Pennsylvania have filed federal lawsuits after the mayor cut all city employee's pay to $7.25 an hour, the state's minimum wage.
San Bernadino, California, meanwhile, became the third city in California this year to declare bankruptcy.
The city of North Las Vegas, Nevada declared a financial state of emergency beginning July 1st, an authority usually reserved for natural disasters like floods or fires. In this case, the declaration was used to justify cutting town labor costs following a projected budget deficit of $30.9 million for the 2012-2013 fiscal year.
Each town or city that faces financial crises has its own story to tell, but taken together, these stories spin a narrative about the American economic landscape that is impossible to ignore.
The financial crisis of 2008 -- which started in the housing sector -- has continued to spread to municipalities as tax revenues remain depressed and high unemployment numbers endure. Federal assistance has dried up as Washington lawmakers from both parties reside in gridlock and election year inertia make short-term relief unlikely.
As a recent story in The Independent notes, "Fears over civic bankruptcies stretch back to December 2011, when a high-profile Wall Street analyst called Meredith Whitney caused an overnight panic in the municipal bond market, which underpins America's public fortunes, by telling the TV news show 60 Minutes that she believed that there were going to be '50 to 100 sizeable defaults' by debt-ridden cities in the not-too-distant future."
Since 2007, a series of small cities - from Westfall in Pennsylvania, to Moffett in Oklahoma, and Prichard in Alabama - have found themselves in court declaring "Chapter Nine," the part of the US bankruptcy code applicable to municipalities.
City governments -- many who had been pressured to invest in complex financial instruments that promised safe returns but turned out to based on the same risky products that caused the collapse of the credit markets -- saw costs soar just as their revenues collapsed and as many of their citizens demanded more assistance than ever.
A sampling of US towns left in financial ruin (via The Indepenent):
Stockton, California
The biggest city in the US to run out of money so far, it listed a debt of $1bn in its bankruptcy application last month
Mammoth Lakes, California
The ski town filed for bankruptcy this week after losing a legal fight costing twice its annual budget
West Fall, Pennsylvania
The economy was doing well in this small town yet its $20m debt still proved too big for it to cope with
Jefferson County, Alabama
Failure to restructure $3.1bn bonds on its sewers sent its finances down the drain
Central Falls, Rhode Island
Went broke last year due to its massive pension bill for the baby boomers among its 18,000 citizens
Vallejo, California
Debt led to police officers being laid off, fire stations being closed, and cuts imposed on other services in 2008
Moffett, Oklahoma
Raised 78 per cent of its income from speeding tickets - until a state-imposed ban on the fines made it insolvent in 2008
Pritchard, Alabama
When town ran out of money for pensions in 2009, it simply stopped paying them, but that was not enough
# # #
We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.