Harrisburg is insolvent

By Cate Long
October 20, 2011

The capital of the Keystone State is swirling with political infighting and power grabs over the issue of money. There is just not enough of it to pay all of Harrisburg’s creditors who have appeared at the door. Now that the county has said “Enough!” to providing more loans to cover debt payments, it’s the end of road and events are accelerating.

Harrisburg has more than incinerator debt

By Cate Long
October 14, 2011

The current bankruptcy drama in Harrisburg, Pennsylvania is just the third act of a long running effort to make the city something more than a corridor for those who commute into the city for work. Most of the current debt problems of Harrisburg stem from failed projects intended to revitalize the city and extremely bad business decisions.

The Dummies Guide to the Pension Crisis

By Cate Long
September 14, 2011

Hat tip to Ted Nesi of WPRI.com for pointing out this excellent union sponsored video that discusses the problems for the public pensions of Rhode Island. Although the details are specific to that state the structural problems apply to almost every state because public pensions across America are underfunded. Every state faces problems that are politically or financially difficult. Either taxpayers will be paying more to top pension plans or retirees will be receiving smaller pension payments. Pension reform is a complex topic and I hope we see more educational efforts like this video.

Local governments’ tough choices between payrolls or bond payments?

By Cate Long
September 1, 2011

Harrisburg walks the well worn path

The capitol city of Pennsylvania, Harrisburg, is functionally if not legally bankrupt. Yesterday the City council voted against the mayor’s rescue plan which would have brought them a small reprieve but would not have fixed their core financial issues. The city’s main problem is a grossly expensive incinerator project which has burdened the city with way too much debt. Their situation is similar to the sewer system woes of  Jefferson County, Alabama on about one tenth the scale. Like Jefferson County, anger about bondholders being prioritized ahead of the needs of citizens was on display at yesterday’s city council meeting. From Reuters:

Irresponsible debt practices

By Cate Long
July 20, 2011

Politicians start telling the truth

In response to Moody’s placing the state’s Aaa credit rating on review, Tennessee’s News Channel 5 filed this story and video, two very good examples of a state government reacting to a possible downgrade. In the video, municipal bond expert and Metro Councilmember Emily Evans says:

Decades-long infatuation with financing our spending

By Cate Long
July 11, 2011

Decades-long infatuation with financing our spending

Sheila Bair, who served as Chairman of the Federal Deposit Insurance Corporation for five years through the financial crisis, has completed her term. In a weekend op-ed in the Washington Post, she urges America to rid itself of its addiction to financing consumption and “growth” with debt. This is the core requirement for America to become financially stable again and to return to “real” growth. From Bair’s Washington Post oped:

No allowance if you don’t do your homework

By Cate Long
June 22, 2011

Photo: California State Controller John Chiang

No allowance if you don’t do your homework

California’s Legislature rushed through a budget last week that they thought was balanced. The State Comptroller has ruled otherwise, and now he is withholding lawmakers’ salaries, the New York Times reports today:

Pennsylvania casts sunshine on muni swaps

By Cate Long
June 1, 2011

When it comes to municipal derivatives, Wall Street has brutalized the poor Keystone State. Though many municipalities, such as Alabama’s Jefferson County, have suffered bigger losses from muni swaps, Pennsylvania is like a cancer cluster of bad derivative deals. State Auditor General Jack Wagner wants to do something about that, and last month he announced that Pennsylvania is creating a public registry of local government swaps. I hope this is a trend for other states. From the office of the Auditor General:

Muniland’s black swans

By Cate Long
April 20, 2011

Are we looking in the wrong places?

John Carney of CNBC argues for the possibility of a black swan event for muniland.