Cities are dropping like flies. In the last several months, a string of municipal governments in states from Alabama to Rhode Island have filed for bankruptcy. Even more are likely to follow within the next year as cities reel from an end to federal stimulus dollars. What’s going on with local governments? Their troubles stem from multiple sources, but the critical factor is, yes, after all this time, still the housing bust. City finances are almost exclusively tied to property tax revenue—indeed, most locales have no other funding source. Despite all the focus on mismanagement and ... Read More
