• yourjizzx cum
  • National Context

    Add one more to the list of cities falling into bankruptcy amid the widespread government fiscal crises of the Great Recession.  The City Council of Harrisburg, the capital of Pennsylvania, voted last Tuesday night to declare Chapter 9 bankruptcy in what is just the next step of a continuing financial disaster that has engulfed the city after a failed trash incinerator project became a $288 million money hole. .

    Before Harrisburg, the last city in the United States to declare bankruptcy was Central Falls, Rhode Island, in late July.  Other U.S. cities that have recently declared bankruptcy include Vallejo, California and Prichard, Alabama.  Chapter 9 of the U.S. bankruptcy code allows municipalities to use bankruptcy to restructure debts, and negotiate settlements with creditors and employee unions, and formulate a plan to get back to fiscal solvency without halting vital city services and functions.   Hefty consequences, including damaged credit ratings and increased borrowing costs for the city, and its county and state, can linger as a result of a bankruptcy. 

    A city must act under a state authorization in order to declare bankruptcy, which is already being called into question in Harrisburg.  The Pennsylvania law cited as authorization is the 1987 Financially Distressed Municipalities Act, aka. “Act 47” which set up a state-level program to help cities get out of fiscal stress, but left the decision to go into bankruptcy up to the local government with a few conditions.  Harrisburg entered the state’s Act 47 program in early 2010 after failing to meet debt obligations associated with the incinerator; however, the city council subsequently rejected the financial management plan proposed by the state.  The city council then filed for bankruptcy unilaterally, (which has been called illegal by the Mayor and Solicitor of the city) coming amid a bill currently going through the state legislature that will allow for a state takeover of cities, like Harrisburg, that rejected an Act 47 plan.   Whether or not the bankruptcy filing holds up in federal court remains to be seen.

    Here in Michigan, municipal fiscal stress is governed largely under the controversial 2011 Local Government and School District Fiscal Accountability Act, aka “Act 4”, which replaced a 1990 law by increasing the power of the state level Emergency Financial Manager (EFM) over a fiscally distressed city.  Under Michigan law, only the state appointed EFM may file for bankruptcy on a city’s behalf.  This played out in 2010 when the city of Hamtramck tried to unilaterally file for bankruptcy, but was stonewalled by outgoing governor Jennifer Granholm.




    Sources and Further Reading:

    http://www.philly.com/philly/wires/ap/news/state/pennsylvania/131591983.html?c=r

    http://www.pennlive.com/midstate/index.ssf/2011/10/harrisburg_city_council_votes_2.html

    http://media.navigatored.com/documents/Harrisburg_Ch9.pdf

    http://www.governing.com/topics/transportation-infrastructure/Harrisburgs-failed-infrastructure-project.html

    http://www.nytimes.com/2010/05/21/us/21harrisburg.html

    http://m.cnbc.com/us_news/44872831?refresh=true

    http://www.bondbuyer.com/news/Harrisburg_pennsylvania_act_47_distressed_municipality-1021117-1.html

    http://harrisburgcitycontroller.com/wp-content/uploads/2010/02/Chapter-9-and-Act-47.pdf

    http://www.mlive.com/news/detroit/index.ssf/2010/11/state_to_hamtramck_municipal_b.html

    http://www.michigan.gov/documents/treasury/FAQs_Act_4_348233_7.pdf

    Urban Affairs - National News

    Feed not found.
    Home
    Agriculture
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Commerce & Regulation
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Criminal Justice
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    In The Courts
    Timeline
    Employment
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Great Lakes & Recreation
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Energy and Environment
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Health Care
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    K-12 Education
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Morality and Family
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Political Reform
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Social Services & Seniors
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    State Budget
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Taxes
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Transportation
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline
    Urban Affairs
    Policy Briefs
    Current Issues
    National Context
    Interviews
    Blog
    Most Popular Posts
    Timeline

    About Us

    The Michigan Policy Network is a student-led public education and research program to report and organize news and information about the political process surrounding Michigan state policy issues. It is run out of the Department of Political Science at Michigan State University, with participation by students from the College of Social Science, the College of Communication, and James Madison College. 

    Read more about us...

    Sponsors

    Michigan State University    Department of Political Science 
     College of Communication Arts & Sciences    James Madison College
     College of Social Science    University Outreach and Engagement

     

    The thoughts, opinions, and positions represented herein are solely those of the participating students and in no way represent an official position or policy recommendation of Michigan State University.

    Our sponsors...

    Meet your Policy Fellow: Michael Raley

    Michael Raley is a fourth year Sociology and Public Administration/Public Policy student at Michigan State University. He is especially interested in the public policy, politics, and sociology of urban space, as well as transportation systems and public transit. A native of the Grand Rapids area, Michael is currently an intern in the office of State Representative Roy Schmidt, who represents the west and northeast sides of the city. He also aspires to pursue a career in urban and regional planning, and hopes to attend graduate school for such a course of study.