This week’s attempted bankruptcy by Hamtramck, Mich. could be the start of an avalanche.
Gov.-Elect Rick Snyder says hundreds of Michigan municipalities are nearing bankruptcy, and the darkest hour is years away, according to Bloomberg:
There are “wealthy communities that are not in that different a position” from Hamtramck, said Snyder, a Republican who is a former computer-company executive. “They simply haven’t had the day of reckoning arrive yet that is liable to happen in the next two or three years, with the way property tax revenues are going,”
“The most challenging period is probably about 2013 to ’15. Literally, there could be hundreds of jurisdictions.”
Michigan’s plan to stave off bankruptcy in Hamtramck is hardly reassuring. The city would receive an emergency loan, while continuing it’s suit against Detroit over tax revenue. If Hamtramck survives, it will do so with money from Michigan and near-bankrupt Detroit.
What happens when hundreds of cities are on the brink?
The city would receive an emergency loan, keeping it afloat long enough to settle a suit with Detroit over tax revenue.
The state has offered various kinds of emergency loan, which Hamtramck would use while settling a