LIBOR Debt Suffocating Municipalities
August 14, 2012 • 12:15AM

Two new studies have been released which demonstrate the real effects that municipalities are faced with as they drown under the weight of fradulent LIBOR-connected debt. As reported in Saturday's Wall Street Journal, a majority of the nation's 19,000 municipalities are facing stagnant property tax revenues and diminished aid from states, not to mention hyperinflationary effects on fuel and food. A study by the Center for Retirement Research at Boston College found that as a result, despite massive cuts, annual pension payments as a percentage of overall budget have more than doubled — to 15.7% of payrolls in 2011 from 6.4% a decade earlier.

Altoona, PA, a city of 46,000, has projected a $3 million budget deficit for fiscal 2012. Under state law, the city can't raise property taxes — its greatest source of revenue — any higher. In April, Altoona was declared fiscally distressed under a state law (a catagory which includes Pittsburgh and the state's capital, Harrisburg), which precludes a bankruptcy reorganization of finances.

"We just don't have the income to match our expenses," Mayor William Schirf told the Urinal. "We need help right now." Crime in the city rose 11% last year, as the number of police officers was cut 8% over the last three years. The city has reduced the number of streets it is repaving and clearing of snow; cut down on leaf pickups and removal of dead animals, trash, and bicycles from roadways.

Another example cited by the WSJ is Princeville, N.C., a small town in the eastern part of the state, which handed control of its books to a state commission in late July, after issuing bonds for water system updates. The town temporarily turned off water services to about 200 homes, as residents couldn't pay the higher bills.

Separately, a Saturday article in the New York Times notes that the homeless population in the city is "exploding," and that Mayor Bloomberg is dealing with it in his own "Mussolini Mike" fashion. With the population up 18% in just the last year, the shelter system in the city recorded 43,731 homeless people (25,475 adults and 18,256 children) last week. Bloomberg has answered by opening "nine or more" shelters in the last two months, at least three under an "emergency decree," under which it could bypass civic input. Other shelters are being opened "within days" after notification is given, allowing for only the barest of improvements to buildings.