States Going Belly Up Part 3

Los Angeles, CA -

AFTER a week of fruitless debate, the Los Angeles City Council takes up the budget debate again today. And if past discussions are any indication, very little will be decided by a council too afraid to make the hard - and politically unpopular - decisions. Instead the city will slip one step closer to insolvency. The city of Los Angeles is in immediate financial danger with a $212 million shortfall just for the last few months of this current fiscal year. Next fiscal year, which begins in July, the city is anticipating $400 million less in revenue than expenses.

Vallejo, CA -

Public officials shouldn’t think about filing for Chapter 9 municipal bankruptcy to solve mounting labor costs and pension liabilities. Even talking about this action will invite an inquiry from Fitch Ratings, the company said in a report published Jan. 27. “The more bankruptcy is publicly discussed as an option for financial relief, the more its tarnish wears off, increasing the likelihood of its actual use,” Fitch said. The biggest financial crisis since the Great Depression is squeezing municipalities across the country. Since Vallejo, California, successfully petitioned for bankruptcy protection in May 2008, California’s towns, Detroit’s schools and Pennsylvania’s capital city of Harrisburg have all talked about Chapter 9.

Harrisburg, PA -

Pennsylvania’s capital of Harrisburg was downgraded to five levels below investment grade by Moody’s Investors Service, as the city considers bankruptcy in the face of $68 million in debt payments this year.
Harrisburg’s city council and controller, Dan Miller, have said Chapter 9 bankruptcy protection is one option under consideration as the city contends with debt payments this year that exceed the size of its general fund budget for services such as police and parks.

N.J. -

Calling New Jersey on "the edge of bankruptcy," Gov. Chris Christie today declared a fiscal emergency, seizing broad powers to freeze aid to more than 500 school districts and cut from higher education, hospitals and the Public Advocate.
Along with eliminating programs "that sounded good in theory but failed in practice" across state departments, Christie is cutting $475 million in aid to school districts, $62 million in aid to colleges and $12 million to hospital charity care.

Nationwide Zillow says it about to get much worse -

December brought signs that the fledgling recovery of home values in many markets is slowing again. U.S. home values got a bit lower again in December relative to November levels and the rate of decline got just a little bit higher as well.
More significantly, a number of large markets saw an end to their streak of consecutive monthly gains, including Atlanta, Baltimore, Boston, Denver, Minneapolis, and Portland, Ore. In total, one in five (29) of the 143 markets tracked by Zillow saw monthly depreciation or flattening of home values in December after having experienced at least five consecutive month-over-month increases in home values during 2009. If these declines are sustained, as we expect to happen in many markets, the result will be a “double dip ” in home values, defined as two periods of sustained declines in home values separated by a brief period of stabilization or recovery.

And how does the establishment "deal" with the issues?

Three state Senate committees are set to consider legislation that would raise Hawaii's general excise tax and use special state funds to eliminate teacher furlough days later this year.

What a joke.