American Cities Teeter on Brink of Bankruptcy
Economic Downturn, Mounting Debt Push Cities to the Brink; Maywood, Calif., Lays Off Everybody:
“Come Thursday, the small, working-class enclave of Maywood, south of downtown Los Angeles, will lay off all its employees, eliminate its police force and contract a neighboring city to run municipal operations.
How to prepare for the worst if the economy doesn’t turn around.
More than 100 city workers — the people who keep Maywood’s streets paved and parks clean, school crossing guards and police veterans — will get pink slips. The action is without precedent in the state of California. The police department, which had enjoyed a love-hate relationship with the mostly immigrant city of about 50,000, will account for 70 of those jobs, including 47 sworn officers.
“We’ve become the extreme example in that the city is now contracting all of its municipal services, absolutely everything, to another city that will now generate revenues off that,” Maywood Police Chief Frank Hauptmann told ABCNews.com. “Some ask the question, ‘Why even have a city anymore?'” From California to Pennsylvania, cities and towns are being pushed to the brink by the lingering economic downturn and mounting debt. The obligations of state and local governments have doubled to $2.4 trillion in the past decade, according to a recent report by the Federal Reserve. ..
…Tucked into the heavily industrial southeast part of Los Angeles County, Maywood is predominantly Latino and densely packed into just 1.2 square miles. Officials estimate about half of the city’s residents are illegal immigrants. Critics have blamed the city’s woes on what they call the ineptitude of local governments. In May, the California Joint Powers Insurance Authority, a government agency made up of more than 120 cities to share costs, advised Maywood officials to end years of “passive administration.”
http://abcnews.go.com/Business/maywood-california-top-cities-overwhelmed-recession/story?id=11032953&page=1
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