What is the probablity that your State Bankrupts?

[RonBoyd]

I seemed to have missed something. How did this thread go from State bankruptcy to global warming?

I always liked Ernest Hemingway's answer (although he was responding to "How did you go bankrupt?).

"Slowly at first. Then quit rapidly."

 

[dm]

Huh? Most of the banks have paid back their TARP money. What do you mean "blown"?

Audrey

I meant the stimulus money that was spent on highway construction. The money that Missouri was given was spent last year.

 

[Bikerdude]

I seemed to have missed something. How did this thread go from State bankruptcy to global warming?

Well a tax on the latter would allow states to balance their budgets while claiming that they were saving you. Do you remember the tobacco settlement? I think our state spent about 1% on preventing tobacco use and 99% was used in the general fund to keep the current political machine in power.

 

[Martha]

A state may not not be a debtor under the U.S. Bankruptcy Code (i.e. "file bankruptcy" as that term is commonly used). A municipality may be a debtor (a Chapter 9 case) only if specifically authorized by state law (See 11 U.S.C. Sec. 109). The City of Bridgeport, CT tried to file a bankruptcy petition about 19 years ago and, at the urging of the State of CT, was thrown out of court.

I think the short answer is that the state simply stops paying its obligations. To the best of my knowledge, during the Great Depression only one state (Arkansas, I think) defaulted on its General Obligation bonds. There have been no state defaults since. And municipalities rarely default. See this Moody's special report http://www.moodys.com/cust/content/...licy+research/documents/current/102249_rm.pdf which was admittedly published prior to the latest crash, but has some good historical information.

The other issue is even if a municipality files bankruptcy, there are certain debts that it may not be able to address. IIRC, no municipality bankruptcy has wiped out vested pension benefits and it is questionable whether they can. However, bankruptcy is useful for setting aside current collective bargaining agreements.

 

[Nodak]

I seemed to have missed something. How did this thread go from State bankruptcy to global warming?

I apologize for that; it all started about post number 26. I should not have responded to some of the following posts.

 

[RonBoyd]

How, exactly, would a government entity the size of a State go Bankrupt. Would it stop paying its debts and have a special Court take over the operations? Would the Legislature be required the seek permission before voting or simply be declared null and void.

All in all, this doesn't seem such a bad thing, does it?

On the other hand, it could only invite a whole new infestation of Weasels.

Apparently, I am not the only one who wants an answer (or, in this case -- speaking of Weasels, a solution):

A Path Is Sought for States to Escape Their Debt Burdens

Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court.

 

[Delawaredave5]

Disturbs me that this country has a "bailout mentality" - print more money and all will be well....

Only benefit I see about a state bankruptcy declaration is the ability to sever/renegotiate state labor pay/retirement contracts.

 

[REWahoo]

Only benefit I see about a state bankruptcy declaration is the ability to sever/renegotiate state labor pay/retirement contracts.

No more phone calls folks, we have a winner!

 

[clifp]

No more phone calls folks, we have a winner!

The economist recently published a map of US states comparing their GDP to countries. So for example California is Italy (it used to be France) and little Hawaii had the GDP equivalence of Croatia.

I think it would interesting map showing the fiscal health of states compared to countries. I am pretty sure that Illinois is about the same as Greece and sure enough Greece cut pensions, government pay and service when it went almost bankrupt.

 

[brewer12345]

The economist recently published a map of US states comparing their GDP to countries. So for example California is Italy (it used to be France) and little Hawaii had the GDP equivalence of Croatia.

I think it would interesting map showing the fiscal health of states compared to countries. I am pretty sure that Illinois is about the same as Greece and sure enough Greece cut pensions, government pay and service when it went almost bankrupt.

Size isn't everything, as they say.

 

[foxfirev5]

We have a perfectly good library right down the street...

There's a new one 4 times the size going up right next to it

My property tax bill just keeps going up too

Our library millage is TWICE that of our fire and police protection. One more time of sneaking those millage propsals into the May elections.

 

[Midpack]

Illinois was mentioned earlier. Did everyone notice the new administration just increased state income tax from 3% to 5%? May not sound like much but it's a 67% increase, $1K/yr for someone making $50K/yr - yowza! Glad I don't live in IL...

 

[clifp]

Illinois was mentioned earlier. Did everyone notice the new administration just increased state income tax from 3% to 5%? May not sound like much but it's a 67% increase, $1K/yr for someone making $50K/yr - yowza! Glad I don't live in IL...

Just curious since your location is listed as Chicagoland, any chance Chicago will do a similar thing as NYC and start collecting income tax for people who work in Chicago but live in another city/state?

 

[RonBoyd]

Just curious since your location is listed as Chicagoland, any chance Chicago will do a similar thing as NYC and start collecting income tax for people who work in Chicago but live in another city/state?

Denver has had this for years (25+?). They call it an "Occupational Privilege Tax."

http://www.denvergov.org/Treasury/F...tlyAskedQuestions17/tabid/424632/Default.aspx

 

[clifp]

Denver has had this for years (25+?). They call it an "Occupational Privilege Tax."

Treasury Division - Frquently Asked Questions

I learn something on the forum most every day. I love the name occupational privilege, although at $5.75/month it is hardly worth getting too riled up about.

 

[RonBoyd]

I learn something on the forum most every day. I love the name occupational privilege, although at $5.75/month it is hardly worth getting too riled up about.

Yeah, but a lot of people did... and still do.

In the beginning, they tried a "live or work" in Denver approach... and was successful for quite a while IIRC.

 

[Texas Proud]

Yeah, but a lot of people did... and still do.

In the beginning, they tried a "live or work" in Denver approach... and was successful for quite a while IIRC.

One of the things that people tend to forget is that if you work in downtown Whereever... then that city does provide you with services... they clean the streets, provide police, provide utilities (street lights, traffic lights)... etc. etc... since you are using these services it seem fair to tax the people who use them...

 

[Rustic23]

Texas Proud,
I disagree, the cities are getting big bucks for everyone of those downtown buildings in the way of property tax. It should more than pay for the street sweeper to make it's once a year venture down the street. As has been said many times here and elsewhere, it's not the taxes that are killing the cities, it is the spending, and no politician has shown any real husspa to control it.

 

[Ronstar]

One of the things that people tend to forget is that if you work in downtown Whereever... then that city does provide you with services... they clean the streets, provide police, provide utilities (street lights, traffic lights)... etc. etc... since you are using these services it seem fair to tax the people who use them...

And the parking tax,taxi tax, and 10% tax on everything I buy in the city is not enough?

 

[RonBoyd]

This is like Deja Vu all over again.

 

[swampwiz]

Even neighborhoods with low levels of library users (eg. Northgate) have huge fancy new buildings. Nice surroundings for the staff, but of no interest to the primary purpose of a library.

Eventually all these buildings, the good ones and the detestable, will be obsolete and replaced by Kindle type readers and electronic access. Then the street pople, ERs and people trying to get out of the rain will have to find another solution.

Ha

I disagree. The parish (county) that I was planning on living (i.e., before my Chapter 7 filing forced to buy in a much lower cost area ) just recently built a set of nice modern libraries. These are buildings that exude a warm and stately feeling, which adds to the intellectual stimulation for the patrons. Perhaps the buildings themselves will be the deciding factor in whether or not some little boy would rather read or not, and in that sense it is worth the public spending.

 

[Martha]

Illinois was mentioned earlier. Did everyone notice the new administration just increased state income tax from 3% to 5%? May not sound like much but it's a 67% increase, $1K/yr for someone making $50K/yr - yowza! Glad I don't live in IL...

Smart move. Its neighbor Wisconsin has even higher rates.

 

[Gone4Good]

Illinois was mentioned earlier. Did everyone notice the new administration just increased state income tax from 3% to 5%? May not sound like much but it's a 67% increase, $1K/yr for someone making $50K/yr - yowza! Glad I don't live in IL...

Illinois is one extreme; all tax increases and no spending cuts. But I'd still rather live in IL with a 67% tax increase than in Camden, NJ. Camden was already one of the most dangerous cities in the U.S., and they just recently announced a 44% reduction in their police force to close budget gaps.

 

[HFWR]

Texas is a fairly conservative, low-tax state, and we have the numbers to prove it... And has managed to run a pretty hefty deficit of late. I'm [-]tripping[/-] cautiously optimistic that our molasses-like economy will continue to [-]inflate[/-] expand, and tax revenues with it, which in turn will make the outlook less gloomy...

 

[M Paquette]

Texas is a fairly conservative, low-tax state, and we have the numbers to prove it... And has managed to run a pretty hefty deficit of late. I'm [-]tripping[/-] cautiously optimistic that our molasses-like economy will continue to [-]inflate[/-] expand, and tax revenues with it, which in turn will make the outlook less gloomy...

Yeah, it's funny how a tidy looking budget and spending plans go poof when the revenue stream dries up.

That's largely what bit California, combined with legislative gridlock. A nice budget that relied heavily on income tax revenue from high earners, combined with the assumption that the Roaring '90s would go on forever, supplemented by a lovely stream of taxes from non-qualified stock options... Then, toss in optimistic assumptions that a downturn was sure to end within a year, repeat annually, and...