THE CAPITAL CITY OF A RICH BLUE STATE IS BEGGING FOR A BAILOUT FROM THE STATE LEGISLATURE BECAUSE BANKRUPTCY IS IMMINENT. THE PROBLEM IS, THE STATE HAS ITS OWN BUDGET ISSUES TO DEAL WITH…
Most liberals do not believe that governments must follow the same principles of sound and responsible budgeting that businesses and individuals must follow. Where the individual or the family knows quite clearly the dangers of consumer debt and its power to turn on them at a moment’s notice and wipe them out, it is as if governments think they have charmed this slippery viper.
While businesses that indulge in debt-fueled rapid growth and expansion during the boom times are the most likely to fall victim to bankruptcy during economic downturns, liberals think governments are not bound by the same financial limits.
REALITY IS HITTING THE FAN
But now, the rug is being pulled out from under them. Hartford, Connecticut, has sounded an alarm:
Hartford officials said Thursday it will likely file for bankruptcy in 60 days unless Connecticut provides help for the cash-strapped capital city in the midst of a fiscal emergency.
City officials warned Gov. Dannel Malloy, a Democrat, and state lawmakers that Hartford, which has a deficit approaching $50 million, wouldn’t be able to pay all of its bills within 60 days. Hartford officials said it would file for bankruptcy at that point unless the state legislature passes a budget that gives the city more funding or otherwise provides it with more cash.
“We face the greatest fiscal crisis in our city’s history,” officials said in a letter signed by Mayor Luke Bronin, Treasurer Adam Cloud and Thomas Clarke II, president of the court of common council.
Hartford is strapped for cash. The reason?
Pensions, healthcare, and debt obligations. Political promises that it can no longer keep. The city politicians have been playing hot potato, kick the can, and musical chairs for a very long time. Now, the music is about to stop. The can has gotten too heavy to kick.
Rising fixed costs for health care and pensions have been driving Hartford’s fiscal challenges. The city is on the hook for nearly $180 million in payments for debt service, health care, pensions and other costs for the current fiscal year. That is more than half of the city’s budget, excluding education.
Hartford’s officials said the city has a debt problem. The city said its law firm of Greenberg Traurig LLP will engage in negotiations with its bondholders and asked the state for its support.
The city is incapable of cutting services much further than it already has. It is backed up against unmovable pension, health care, and debt liabilities. So it’s asking for a bailout from the state legislature. Problem is, the state is up to its eyeballs in debt, too…