(NationalSentinel) Left-wing, ‘progressive’ Democrats have owned leadership in most major U.S. cities for decades, and now their economic policies of MEEP–“Make Everyone Else Pay”–are coming home to roost in a big way.
Many face financial dire straits and are on the verge of collapsing under massive amounts of debt thanks to overly-generous, taxpayer-and-contributor funded pensions and other entitlements they can no longer afford, thanks to eight years of President Obama’s economy.
As reported by The Fiscal Times, the country’s two largest cities are in the worst shape:
Chicago and New York rank at the bottom of a new analysis of fiscal strength based primarily on data from 2015 financial reports issued by the cities themselves. The analysis includes 116 U.S. cities with populations greater than 200,000.
Chicago’s position at the bottom of the ranking is no surprise to anyone who follows municipal finance. The Windy City has become a poster child for financial mismanagement, having suffered a series of ratings downgrades in recent years. Aside from having thin reserves and large volumes of outstanding debt, Chicago is notorious for its underfunded pension plans. …
While Chicago’s place at the bottom of the list is unsurprising, New York City’s position — just one step above — was unexpected. An extended bull market and soaring real estate prices have pumped money into the Big Apple’s coffers. Total municipal revenues rose from $60 billion in 2009 to $81 billion in 2015. But the city has been spending the money almost as quickly as it has been coming in.
At the end of its 2015 fiscal year, the city’s general fund reserves amounted to just 0.67 percent of expenditures — well below the Government Finance Officers Association recommendation of 16.67 percent (equivalent to two months of spending). A city’s general fund is roughly analogous to an individual’s checking account.
The Los Angeles City Council in recent years has repeatedly settled costly, high-profile lawsuits, agreeing to spend millions of dollars to end litigation brought by grieving families, disability-rights groups and people wrongfully convicted of crimes.
City Hall leaders championed some of the settlements as having a silver lining for taxpayers, such as one in 2015 that created a program to fix L.A.’s buckling sidewalks.
But a surge in legal settlements, along with court judgments against the city, is outpacing the city’s ability to keep up.
With payouts projected to total at least $135 million this fiscal year, budget officials said Monday that the city needs to immediately borrow up to $70 million to avoid dipping into its emergency reserve fund.
It should be obvious by now that Democrat-run government is unsustainable, at any level but certainly at the macro-level. The country’s largest municipalities are all run by Democrats, and they are nearly all in some sort of financial trouble.
The problem is reversible, but it will two things: A change in voter habits and years of fiscal pain in order for these cities to get right again, financially speaking.