Pennsylvania’s capital city cannot pay its bills:
(Reuters) – Pennsylvania’s distressed capital city, Harrisburg, will skip $5.3 million of debt payments due next week, the first time the city has defaulted on its general obligation bonds, to ensure there is enough cash to fund vital services.
Pennsylvania’s capital of 50,000 people is mired in $326 million of debt due to the expensive retrofits and repairs of its troubled trash incinerator.
There is something poetic about a trash incinerator bringing down Harrisburg. If only they’d put more spending measures into it.
And in Rhode Island, the pension tsunami is rolling ashore:
The smallest city in the nation’s smallest state — Central Falls, Rhode Island — is bankrupt. The main reason is it can’t afford the pensions for its retired city workers. How the city is digging out of its financial hole may have consequences for city pensions in other cash-strapped towns across the country.
For years, city officials promised robust union contracts and pensions without raising revenue to pay for them. Last August, the math caught up with them. Central Falls was broke, its pension fund short $46 million. It declared bankruptcy.
I wonder how many states and municipalities will be insolvent on Election Day, 2012. Guesses?