WBIW.com News - state

Brought to you by WBIW News and Network Indiana

Bankruptcy May Be Available For Struggling Cities

Last updated on Tuesday, April 19, 2011

(UNDATED) - Indiana cities struggling to pay their bills could have a new option available soon… bankruptcy.

The mayor and city council would have to agree to let the state appoint an emergency manager to take one last try at slashing the budget, renegotiating contracts, and doing whatever else it takes to balance the books.

Going bankrupt would be the manager's decision.

Other local governments, such as counties or school corporations, could take the same step with approval from their executive and legislative bodies.

The senate has already passed a similar bill.

The house votes Wednesday or Thursday, following an 8-1 vote in the Judiciary Committee.

State Public Finance Director Cris Johnston doubts any city will declare Chapter 9, but says it's important to have the option available.

He notes Gary has been to a state appeals board twice to plead for a waiver to collect more in taxes.

Huntington Republican Dan Leonard cast the only no vote.

He says it's irresponsible for local governments to spend themselves into that position, and unfair for the state to protect bondholders while the vendors who count a city as a customer are left to fend for themselves.

1340 AM WBIW welcomes comments and suggestions by calling 812.277.1340 during normal business hours or by email at comments@wbiw.com

© Ad-Venture Media, Inc. All Rights Reserved.

Click here to go back to previous page