Baltimore Is On The Road To Bankruptcy
Baltimore, MARYLAND - The Baltimore city government is heading for financial ruin and must enact major budget reforms to avoid bankruptcy, an outside firm forecasts.
The forecast was obtained by The Associated Press ahead of its release to the City Council and the public on Wednesday. It shows that unless things change, the city will accumulate nearly a billion dollars in budget deficits over the next decade , leading to possible bankruptcy.
If Baltimore’s infrastructure needs and its liability for retiree benefits are included, the total shortfall is expected to be more than $2 billion over 10 years. Baltimore’s annual operating budget is $2.2 billion.
The forecast by Public Financial Management Incorporated, a consulting firm which has delivered the same service for other state capitals, will provide the basis for financial reforms that Mayor Stephanie Rawlings-Blake plans to propose shortly. Baltimore has dealt with budget deficits for the past several years, closing sizable gap in 2010. Quick fixes, however, rarely solve the long-term problem.
According to Fox News, Mayor Stephanie Rawlings-Blake says:
“When you have budget after budget and you know that there are systemic problems, I felt an obligation to do more than what we have done in the past … before it’s too late, and somebody is coming in and making these choices for us.”
In Baltimore, tax erosion is easy to see, says the Huffington Post. The city’s population has dropped from a peak of 950,000 in 1950 to 619,000 today, and still shows signs of dropping. The average income is $40,000, and over a fifth of the city’s residents live in poverty.
Do you think Baltimore’s government can fix the problem, or are they doomed to mirror the national deficit straight into bankruptcy?
— Hannibal King (@HanniFresh) February 9, 2013