Detroit is not the only one to go for bankruptcy – More cities are on the pipeline
If you wonder that Detroit is the only city to go for bankruptcy, then you’re hugely mistaken. More cities are going to file bankruptcy soon. Detroit is only the first one to file bankruptcy, nothing else. It is expected that cities such as Chicago, New York, Philadelphia, etc. may go bankrupt anytime. As per a recent audit conducted by Manhattan Institute, many Chicago pension funds are in a very bad financial shape. It is said that around 25 percent of the pensions are funded. However, there is a big question about how 75 percent of the funds will be generated in future.
Check out some other cities which may get into serious financial problems after Detroit bankruptcy incident.
1. East Greenbush, N.Y: The city has amassed a huge amount of debt due to lack of proper money management. Controversial employment contracts and illegitimate reimbursements to administrative officers have brought the city to this predicament.
2. Compton, California: The city is on the verge of bankruptcy. It has accumulated a grand-fund deficit of around $40 million. The city has already made a big hole in the pocket of the Federal Reserve. It has borrowed around $22 from the federal government funds already.
3. Irvington, N.J: The crime rate of this city has already surpassed the New Jersey’s average. This single fact can give you a fair indication of the economic condition of the city. The foreclosure rate in this city is quite high. On the other hand, the state income is much below than the average of other cities.
4. Harrisburg, Pa: This city has accrued a debt amount of around $345 due to the municipal bonds. The city was the guarantor of the bonds.
5. Wenatchee, Washington: This particular city is again in $42 million debt due to some unavoidable financial problems. Most of the financial problems are associated with that of the Town Toyota center.
6. Taylor, Michigan: This city is going through serious financial problems due to the drop in the taxable income, financial rigidity and some pension issues.
7. Philadelphia School District, Pa: The city’s school district is facing almost $304 million shortage in the $2.35 billion budget. The city is trying to arrange $133 million from labor-contract savings.
8. Oakland, California: The city has to spend around $4 million each year due to the Goldman Sachs-brokered interest rate change. Moreover, in a recent audit, it has been found that the city has lost nearly $250 million after a pension bond sale.
9. Strafford County, N.H: This city is known for frequent borrowing. The city borrows in order to fulfill its short-term financial requirements. The financial condition of the city has worsened after the city exhausted almost 2-5th of its budget, which is $36 million on hospitals between the period of 2004 and 2009.
Thankfully, the stock market of the country has indeed performed well during the first half of 2013. This has prevented many cities from filing bankruptcy. However, there’s a huge doubt if any of these cities can survive any further financial setback. The worst part is that cities like Illinois, Washington D.C have their own fair share of financial problems. So, they’re less likely to come forward and help the other troubled cities.