Scioto County, Ohio in Bankruptcy; Other States Furlough Workers to Save Cash
August 29, 2009 • 3:56PM

State and local governments of all kinds —counties, towns, school districts, court systems—are sinking into worse dysfunction by the day, because of the impossibility of coping with the collapsing economy and revenues. Pennsylvania and Connecticut are still in a stand-off over how to even devise a budget for the FY 2010 fiscal year that already started July 1. Many states and localities are resorting to worker furloughs—that is, no-pay, no-work days, in the hopeless attempt to cut expenses as fast as their revenue is dropping. The governors of Rhode Island and Maryland are among the latest to announce such furloughs, joining the ranks led by Guvernator Schwarzenegger, who began the first ever unpaid furloughs in California, in February, for 200,000 state workers, twice a month.

* OHIO. Scioto County has become the state's first county to be declared bankrupt. On Aug. 18, the Ohio Auditor's office placed Scioto in "fiscal emergency," the state's official designation for bankruptcy. County employees have been asked to take a day off every other week, to conserve funds. Scioto County is on the Ohio River; it once was thriving, along with its chief rivertown, Portsmouth, when the Great Lakes/Ohio mills and manufacturing were functioning. Now, the Ohio River Basin economic base has collapsed.

In Mahoning County, Ohio, home to the former steel mill town Youngstown, the county court system was on the verge of shutdown due to budget cuts, when this week, Mahoning County commissioners gave emergency approval for $200,000 to reinstate 13 court clerks, to keep the judiciary open awhile longer. This came about after a probate court judge filed a mandamus lawsuit, demanding that county officials act, or there would be civil breakdown. Since 2007, the LaRouche HBPA Resolution was passed by the City Council of Youngstown and other municipalities in Mahoning County, whose national enactment would have prevented the current debacle.

* MICHIGAN. In Detroit, a decision is pending by the state school superintendent on when to declare the Detroit School System in bankruptcy, termed "financial emergency." Such a "Chapter 9" municipal bankruptcy has been rare until now. Currently, Vallejo, California is the biggest local government in Ch. 9.

* RHODE ISLAND. On Aug. 24, Gov. Donald Carcieri announced that he will put 81 percent of the state's 13,550 workers on furlough-without-pay for 12 days, between now and June, 2010. All state offices, except for police, prison and other vital security services, will be shut those days, to help close a budget gap of $590 million.

* MARYLAND. On Aug. 28, General Assembly leaders announced that over 630 workers in the state legislative branch, will be required to take unpaid furlough days, which are planned to include 5 days around holidays, etc. This follows on Gov. Martin O'Malley's plan for executive branch workers to take three to 10 unpaid daily leaves during the 2010 fiscal year. (mgm)