Wall Street Journal: State Intervention Helps Distressed Cities, But Not Detroit
Fewer than half of the states have laws allowing them to intervene when counties or cities like Detroit get into financial distress, according to a new report from Pew Charitable Trusts, which found uneven success among such efforts.
States generally get involved after local economic conditions tank instead of trying to intervene earlier, according to the report, which looks at how seven states dealt with such fiscal problems.
Proactive monitoring of local conditions by state officials, limited intervention for a set period of time and plenty of communication with local officials would likely make such efforts easier and less likely for cities to head for bankruptcy court like Detroit.
“The reason why states tend to intervene is that they realize that there’s a stigma attached to having a bankruptcy,” said Kil Huh, director of state and local fiscal health at the Pew Charitable Trusts. “It may affect how other investors or companies would look at any area.”
Read the full article at wsj.com.
- States' Fiscal Health