the government has defaulted on the Target Center
Here in Alaska the state is moving the budget pig further down the python by cutting revenue sharing to local communities. I see the same thing is happening in Minnesota...
Hard Times at City Hall (Minneapolis)
The State of the City? We're Broke.
citypages.com
Two weeks ago Gov. Tim Pawlenty fired the first shot in what promises to be a protracted battle between the state ofMinnesota and its local governments. Announcing his plans for erasing a huge state budget deficit, Pawlenty proposed to cut funding for Local Government Aid--the state assistance that goes to cities for general operations--by 22 percent over the next two years. Assuming the tough fiscal language of a CEO, the governor suggested that any city leader who couldn't find ways to deal with the cuts should be fired.
...
In 1991, in the midst of the last true nationwide recession, Mayor Don Fraser warned of "belt-tightening" ahead in his annual budget address. Fraser oversaw a city that was then around half a billion dollars in debt for bonding projects. At the same time, Minneapolis's cash expenditures were consistently exceeding its revenues, by as much as $84 million in 1991. By the time Fraser left office in 1993, the debt had grown to $726 million.
But those numbers would soon seem modest. After Fraser, the debt spun out of control. City leaders began balancing the books through a combination of bonded debt and debt-shifting maneuvers that were the equivalent of paying off a MasterCard with a Visa. Led by then-mayor Sharon Sayles Belton and a city council obsessed with big development projects, the city plunged ahead. In 1995, Minneapolis spent $132 million more than it made. It didn't stop there. By the time Sayles Belton left office, in 2001, the city's debt was approximately $1.5 billion, and Minneapolis paid $137 million in debt service that year.
From 1990 to 2001, there wasn't a single year in which the city's expenditures didn't exceed its revenues. (The city's 2002 financial statement is not yet available.) The year the budget came closest to being balanced, at the height of boomtime in 1997, the city spent $427.7 million and took in $427.4 million. All told, in those 12 years the city spent $644.7 million more--not including debt--than it took in. And the amount of its total indebtedness--between $1.1 billion and $1.5 billion, depending on how you count--more than doubled. |
