Let’s peer into the looking glass of economic downfall as we view The 11 Largest Municipal Bankruptcies in US History. Though bankruptcy may be something that’s uncommon to our ears in most conversations, this occurrence has started to become a lot more common due to different factors like recession and inflation. Even a few small municipalities listed below would for some reason encounter and suffer impossible debt. Each leads to a filing of bankruptcy as a resolution to their difficult situation. As awful as that may sound, the actions that each of these local governments took was the best that they could do given the current situation.
If you’re looking to not limit yourselves with just these 11 largest US municipal bankruptcies, check out our list on the Top 12 Largest Bankruptcies in US History.
For this list we took into consideration of course as the title denotes the largest debt regardless of how big or small the municipality is or the circumstance which led to the filing.
With that said, let this list prove how difficult it would likely be to tackle a governing body effectively and smoothly. As an individual, this could be a good lesson in economics and management if ever one would encounter a similar situation in business or politics. Maybe this would change your viewpoints on your local governments and inspire a change within you. For a few if not some others, let’s just say that they find these things sort of entertaining. So for both entertainment and informative value, let’s have a look at these municipalities’ stories:
11. Boise County, Idaho
As uncommon as bankruptcies are especially for municipalities, Boise County had suddenly found themselves unable to pay a 6 million judgment against them. In order to protect themselves from their debtors, they had to file for protection last 2010. The large reason for this shortfall is that their budget was way under the costs that they would have to pay to bondholders plus pricey health and retirement benefits for city workers.
10. Vallejo, California
The first of many municipalities in California to experience bankruptcy, Vallejo takes the first mention in this list despite the municipalities’ efforts to cut funding from different sectors. They found their debt and shortfall balloon from 9 to 15 million easily during 2008 which led them to file a unanimous bankruptcy.
9. Central Falls, Rhode Island
Much like the previous bankruptcy, Central Falls, Rhode Island found itself drifting farther and farther as revenue shortfalls grew larger and larger. With the threat of the municipality experiencing power outage and disconnection and with no way out after all the cuts they did. They had to file bankruptcy for 19 million in debt last 2011.
8. Westfall Township, Pennsylvania
Another township that fell to skyrocketing costs was the Westfall Township in Pennsylvania. The increasing costs for retirement benefits proved too much for their locality as they deemed paying 20 million in debt impossible last 2009.
7. Mammoth Lakes, California
Mammoth Lakes is another of many California municipalities that went into bankruptcy in the last few years. This was due to a judgment put on the municipality for 43 million which they were unable to pay. The filed for bankruptcy last 2012.
6. Harrisburg, Pennsylvania
Harrisburg went too far with an incinerator overhaul and expansion project. This eventually led the municipality to 240 million in debt. With no other steps and options to take they filed for bankruptcy last 2011.
5. San Bernardino County, California
San Bernardino County continued to stagger from bankruptcies as they had barely recovered from the last one before falling into one again last 2012. They had cut all pension benefits and other funds, yet with a number of new and expensive developments, the county soon found itself on half a billion in debt.
4. Stockton, California
California reaches into the billions in debt with Stockton earning 1 billion in debt last 2012. Another victim of expensive pension costs and debt, Stockton is still trying to exit out of this situation with recent events leading to a possible solution out of bankruptcy this year.
3. Orange County, California
The last of the California municipalities to go into the list is Orange County. Compared to all other places in this list, Orange County is the only one that had a bankruptcy problem that emerged around the 90s. As long ago as that may sound, they found themselves at twice the debt with a deep 2 billion dollar hole.
2. Jefferson County, Alabama
Formerly considered as the largest bankruptcy ever filed, Jefferson County takes a step back as they earn second place with a debt of 4 billion last 2011.
1. Detroit, Michigan
The largest municipal bankruptcy in US history shoots forward because of its whopping 18-20 billion dollars in debt filed last 2013. Detroit is also considered the largest population to ever file bankruptcy resulting in a large loss in their population in recent years.
There you have it the list of The 11 Largest Municipal Bankruptcies in US History. Only time will tell if any other would try and penetrate into the ranks.
