Saturday, July 21, 2012

Compton will run out of money 9/1/12, high unemployment

"Compton, Calif. could be the fourth city in the Golden State to seek bankruptcy protection.  At a city council meeting Tuesday, officials announced that Compton is set to run out of funds by Sept. 1. Compton, which has only 93,000 residents, faces a deficit of $43 million after having depleted a $22 million reserve, reports Reuters.

....  Standard & Poor's put Compton's revenue bonds on a negative credit watch last Friday, citing concern over allegations of "abuse of public moneys" and fraud, reports the Los Angeles Times.  S&P also warned that unless they receive independently audited financial information from Compton, the city's ratings -- already at BB, or "junk" status -- could be withdrawn or suspended.

"I guess its time for trama, with the E-A-Z-Y-E comma "
....  While it's unknown exactly why Compton faces such dire financial straits, the city has collected less property taxes due to rising home foreclosures, notes Reuters. Compton also has an unusually high unemployment rate of 18.8 percent. Nationwide, that figure is 8.2 percent.
The string of California bankruptcies is part of a larger trend of local and state governments facing budget woes. A recent report from budget experts found that local governments will likely face intense financial challenges in years to come if no one takes action."  The Huffington Post/Los Angeles/Anna Almendrala, 7/18/12. "Compton Bankruptcy?  California city announces that it will run out of funds by September 1." Read Article, includes  embedded ABC, channel 7 news video, 1:.49 minutes.

"Mayor Perrodin was more optimistic than his financial staff that the city could avoid bankruptcy, although he noted similarities between Compton and San Bernardino, which has a population twice that of his city.  Unemployment is worse in Compton than San Bernardino, he said, although both have seen property taxes fall precipitously due to rising home foreclosures.

Unlike San Bernardino, which has a large unfunded liability to pay its employees' pensions, Compton years ago increased its property tax to fund its workers' pension obligations, said Perrodin, and the retirement program is fully funded.

"Those other cities that went bankrupt all had huge pension liabilities that they couldn't meet," said the mayor. "Even so, we're in pretty dire straits."  Reuters, Ronald Grover and Jim Christie, 7/18/12, "Corrected-City of Compton may declare bankruptcy by Septembers-officials."  Read Article   

Reference - City of Compton.  Picture -  New ERA (Compton) 59Fifty Fitted cap.

Submitted by Jim Alex  (article and cap picture)

Posted by Kathy Meeh

1 comment:

Anonymous said...

Why aren't government workers on Social Security like we are?