Marty Basu, Amy Benford, Karl Gunderson, Sean Kramer

1
Marty Basu, Amy Benford, Karl Gunderson, Sean
Kramer
RESPONDING TO MUNICIPAL FISCAL
CRISES Bankruptcy, Bailouts, and Stimulus
2
QUESTION and OBJECTIVE

• Question
• How should the federal government respond to
  municipal fiscal crises?
• Objective
• Identify the advantages and disadvantages
  associated with various forms of municipal
  bailouts and rescues.

3
Organization

• Introduction to the Municipal Problem
• Let Municipality Declare Bankruptcy
• Direct Bailout Loan Assistance
• Indirect Bailout Corporate Bailout in
  Municipality
• Indirect Bailout Infrastructure Spending
• Conclusions

4
Introduction

• The Municipal Problem

5
What is a municipality?

• Political subdivision or
• public agency or
• instrumentality
• of a State.
• Bankruptcy Code 11 U.S.C. Sec.101(40)

6
What is a municipality?

• Corporationestablished to provide general
  local government for a specific population
  concentration in a defined area
• All active government units officially
  designated as cities, boroughs except AK, towns
  except in New England, MN, NY, WI, and
  villages.
• Census Bureau, 2002 Report v-vi.
• Includes special districts schools, water, etc.

7
What is a municipality?

• In 2007, U.S. Census of Government identified
  89,476 local governments.
• 2007 U.S. Census of Government

8
What is the problem?

• Fiscal Crisis
• Money In lt Money Going Out

9
What is the problem?

• Acute Shocks
• Cash On Hand lt Current Expenses
• Shocks lawsuits, natural disaster, recession,
  etc.
• Endemic Fiscal Problems
• Expected Revenue lt Expected Expenses
• Accounting Manipulation
• Underestimate expected expenses
• Overestimate expected revenue

10
What Causes Fiscal CrisisDecreased Revenue

• Decrease Tax Revenue
• Decreased economic activity (sales tax)
• Fewer taxpayers (residents, firms income,
  property taxes)
• Tax Cuts (lower tax rates)
• Decrease in Payments Received from State/Federal
  Government
• State/federal fiscal crisis Budgetary pressures
  upstream decrease downstream assistance
• Alternating political sentiments toward
  assistance

11
What Causes Fiscal Crisis Increased Expenses

• Increased Cost of Municipal Labor
• Union labor wages/benefits/pensions
• Larger workforce
• Increased Demand for Services
• Recession increases demand for assistance
  payments
• Larger population requires more police, fire,
  etc.
• Increased Cost of Credit
• Increased Demand for Capital Expenditure
• Roads, mass transit, parks, buildings, etc.

12
What Causes Fiscal Crisis Other Explanations

• Poor Planning
• Failure to save in boom times to offset busts
• Improper Accounting
• Manipulating how revenue and expenses are
  categorized

13
How are cities different from corporations?

• Monopoly Power to Tax
• Ability to use coercive power of the state to
  collect revenue
• Monopoly Power to Provide Services
• Cities have the ability to choose services
• Effective Constraints
• Politics Voters unwilling to pay more taxes, cut
  services
• Effective Limits on Ability to Tax Taxes drive
  people out
• State and Federal Law Service mandates prevent
  service cuts tax restrictions prevent increases

14
Current Climate

• 84 of cities financially distressed
• Up 20 from six months ago
• 92 of cities expect to have trouble meeting
  needs
• 69 have instituted hiring freezes/layoffs
• 42 are delaying/canceling infrastructure
  projects
• 22 have made cuts across the board

15
Current Climate

• Cities responses
• 50 are increasing charges for services
• 28 are increasing the number of fees
• 14 have increased property taxes
• 6 have increased sales taxes

16
What can the federal government do?

• Do Nothing Ch 9 Bankruptcy
• Direct Bailout Loan Assistance
• Indirect Bailout Corporate Bailout in
  Municipality
• Indirect Bailout Infrastructure Spending

17
OPTION 1

• City Enters Chapter 9 Municipal Bankruptcy

18
Municipal Bankruptcy What are we talking about?

• Question
• If the federal government does not intervene,
  how can the city resolve a current crisis?
• Option File Chapter 9 Bankruptcy
• Renegotiate outstanding debt with creditors.

19
Introduction to Municipal Bankruptcy

• Chapter 9 Municipal Bankruptcy
• Municipality renegotiates outstanding debt

20
Municipal Bankruptcy Quick Facts

• About 500 municipal bankruptcies filed
• Only 15 have been cities, counties, or villages
• Previously use to help cities renegotiate one
  large debt
• Ex Lawsuits
• Recent Cases
• 1991 Bridgeport, CT (unsuccessful filing)
• 1994 Orange County, CA
• 2008 City of Vallejo, CA

21
Steps in Municipal Bankruptcy

• STEP 1 Meet threshold requirements
• STEP 2 File for bankruptcy
• STEP 3 Court files automatic stay
• Prevents creditors from collecting on their debt
• STEP 4 Municipality and creditors negotiate debt
  readjustment plan
• Municipality has exclusive right to submit plans
• STEP 5 Court confirms plan
• Chapter 11 cram down applies

22
Threshold Requirements for Bankruptcy

• Must be a municipality
• Must be insolvent
• Cannot pay debt as it becomes due OR
• Cannot pay debt in the future
• State must specifically authorize bankruptcy by
  statute
• Must desire to effect a plan of adjustment
• Must negotiate settlement in good faith or show
  that negotiation is impracticable

23
Effect of Municipal Bankruptcy

• Municipality not required to liquidate assets
• Court cannot interfere with operation of
  municipality
• Municipality has final say on raising taxes
• Municipality can renegotiate collective
  bargaining agreements (CBAs)
• Pension agreements
• No guarantees to unsecured creditors

24
Past Municipal Bankruptcies
25
Past Municipal Bankruptcies Orange County

• Causes
• County Treasurer invested 2 for every 1 on hand
• Exotic securities were inversely related to
  interest rates
• Interest rates went up, county took 164M loss
• Effects
• Banks seized securities held as collateral for
  debt
• Refinanced debt through issuance of 880M worth
  of new bonds
• Won 400M settlement from Merrill Lynch
• Bond interest rates went up .5

26
Past Municipal Bankruptcies City of Vallejo

• Causes
• Decreased revenue from property taxes and sales
  taxes
• Unbudgeted 3.4M in pension costs from unexpected
  police officers and firefighters retiring
• Cuts in funds from the state
• Effects
• Capped interest rate to 6 on outstanding bank
  loans
• Police Union agreed to decrease staffing, saving
  6M
• Professional Workers union has also reached
  settlement

27
Advantages of Municipal Bankruptcy
28
Advantages of Municipal Bankruptcy

• Ability to stop run on municipality funds
• Increased leverage in negotiations
• No protection for unsecured creditors
• Exclusive right of municipality to submit debt
  adjustment plan
• Gerrymandering of classes of creditors
• Ability to renegotiate pension plans of municipal
  retirees

29
Disadvantages of Municipal Bankruptcy
30
Disadvantages of Municipal Bankruptcies

• Obstacles to getting into Municipal Bankruptcies
• Insolvency requirement leaves municipality in
  dire straits
• Only 23 states allow municipal bankruptcy
• Ruins credit, ability to raise funds through
  bonds
• Orange County affected California, Texas, Maine
• Casts stigma for prospective business owners and
  residents
• Bankruptcy litigation costs are high
• States better equipped to solve the problem

31
Map showing States that Allow Bankruptcy
-- Bankruptcy Allowed -- Bankruptcy Not Allowed
32
Conclusions

• Helps municipalities in need of renegotiating
  CBAs to deal with mounting retirees and pension
  payouts
• Must weigh the benefits from decreasing debt
  against cost of litigation and decrease in credit
• Must look at costs to the state and other
  municipalities

33
OPTION 2

• Direct Bailout through Loan Assistance

34
Direct Bailouts What are we talking about?

• Question
• If the federal government is to intervene, how
  should they do so to (1) resolve a current crisis
  and (2) prevent a reoccurrence of the problem?
• Option Provide Direct Loans
• Fill gaps in the citys budget through direct
  loan assistance.

35
Case Study New York City
36
Annual NYC Deficits, 1960-1974(in millions)
37
Case Study New York City, New York 1975

• NYC Budget Self-Reporting to U.S. Bureau of the
  Census. Debt expected to be higher because of
  unfunded pension obligations and misreporting
  capital expenditures. (Gramlich 416-7)

38
NYC1975 Timeline

• 1960s-70s Various NYC mayors agree to large
  wage/benefit increases for local unions, increase
  social services, cook city books relying on
  short-term debt to pay for deficits
• Nov 74-Feb 75 City projects current and future
  deficits, begins working to close gap
• Mar City averts its first cash flow crisis
• Apr State advances city 400 million
• May President Ford rejects citys pleas for help
  saying the city needed to cut its budget

39
NYC1975 Timeline

• Jun After another cash flow crisis, state
  creates the Municipal Assistance Corporation (Big
  MAC) to borrow for the city
• Jul City promises to dismiss 40,000 workers,
  begins to rehire after sanitation strike and
  protests
• Sep State creates the Emergency Financial
  Control Board, effectively asserting state
  control of the citys finances
• Oct City two hours from default, receives
  assistance from city union pensions

40
NYC1975 Timeline

• Nov
• President Ford softens threat to veto bailout
  after plans for new taxes and debt deferrals
• State passes New York City Emergency Moratorium
  Act, imposing a three year moratorium on actions
  to enforce any NYC short-term debt
• Dec Near default again, State Legislature agrees
  to stew of new taxes and President Ford signs
  New York City Seasonal Financing Act (P.L.
  94-143) to provide loans to the city

41
NYC1975 Causes of Crisis

• Proliferating Social Services
• Welfare (1/8 NYC residents)
• City University of NY (free tuition to 266,000
  students)
• Soaring Salaries/Benefits for City Employees
• Wage/pension benefits increased in response to
  union demand
• City workforce grew 37 in10 yrs
• Decreased Tax Base
• Poor immigrants replaced wealthy companies and
  residents who left city

42
NYC1975 Causes of Crisis

• Fiscal Gimmickry
• Accounting for current expenses (salaries) in
  capital budget (more than 800 million in one
  year)
• Skipping 7 yrs of required Rainy Day Fund
  payments
• Push current expenses into future years, while
  accounting for future revenue early e.g. in
  1974 the city decided to move water billing up 6
  months
• Financiers Cut Off Short Term Lending
• After providing NYC with short term debt to cover
  budget deficits for years, concerned lenders
  raised interest rates and refused to buy new debt

43
NYC1975 State and Local Rescue?

• Big MAC (June 1975)
• Created as a separate entity, under state
  control, to raise money on behalf of the city
• Emergency Financial Control Board (Sep 1975)
• State agency created to impose fiscal discipline
  on the city
• Before1986, approved city plans, debt, and major
  contracts
• Still exists to conduct quarterly reviews of
  budget plans
• New York City Emergency Moratorium Act (Nov 1975)
• Placed a moratorium on actions to enforce city
  short-term debt in effect a default itself
• Instead, offered an exchange of short-term debt
  for long-term debt
• Invalidated by NY Court of Appeals in Flushing
  National Bank v. Municipal Assistance Corp., 40
  N.Y2d 731 (N.Y.1976) under N.Y. Const. art. VIII,
  2 (city pledge of full faith and credit)

44
NYC1975 Arguments For Federal Bailout

• Failure of banks that hold NYC debt
• Currency devaluation (European loss of confidence
  in U.S. assets)
• Municipal bond market upheaval
• Severe cuts in services
• Tax increases that will lead taxpayers and
  businesses leave to move out of the city to avoid
  taxes

45
NYC1975 Arguments Against Federal Bailout

• NYC can get itself out of the problem
• Raise taxes and cut spending
• The costs of NYCs problem shouldnt be imposed
  on the nation
• NYC spends like a drug addicted daughter Would
  you help her? Are you going to give her 100 a
  day to support her habit? The answer is no. You
  tell her shes got to go cold turkey. (President
  Fords Press Secretary Ron Nessen)

46
NYC1975 Structure of the Bailout

• NYC Seasonal Financing Act of 1975 (PL 94-143)
• Provides 2.3 billion (9.2 in 2008) in loans to
  help city meet expenses during mid-year cash
  shortfalls
• Loans available each fiscal year through 1978
• Loans to be repaid by the end of each year
• GAO given access to records of city and state
• Secretary of Treasury has power to set loan terms
• Loan Agreement
• Required periodic reporting and earmarking loan
  repayment funds encouraged accounting system
  reform

47
NYC1975 Effect of the Federal Bailout

• Loans resolved immediate cash flow problems
• Not an official default
• Loans did little to resolve the citys long-term
  fiscal problems
• Took until 1986 for the city to balance budget
  and enter sunset of direct Financial Control
  Board control
• Loan terms did not impose greater fiscal
  constraint
• No effect on municipal debt markets

48
NYC1975 Lessons

• Loans can resolve immediate cash flow problems
• To resolve underlying fiscal problems, loans must
  come with control conditions that require fiscal
  discipline
• Include more budget oversight, planning
  requirements, and imposition of accepted
  accounting principles
• Require choices on tax increases or service cuts
  more quickly
• Direct loans are better than guarantees
• Guarantees have a much larger ability to distort
  credit markets
• Avoid cash flow problems
• City should have made hard choices sooner
• Determine feasible spending cuts, tax increases
  before asking for bailout

49
OPTION 3

• Bailout of Local Corporation

50
Corporate Bailout What are we talking about?

• Question
• If the federal government is to intervene, how
  should they do so to (1) resolve a current crisis
  and (2) prevent a reoccurrence of the problem?
• Option Bail out Large Regional Employer
• Bail out corporation within region to create
  jobs, increase tax revenue, and stimulate local
  economy.

51
Introduction to Corporate Bailout
Give capital to a regional business to benefit a
faltering municipality
52
Motives for Bailouts Municipal Assistance

• Business Tax Revenue
• Individual Tax Revenue
• Property Tax
• Income Tax
• Stimulate Local Economy
• Sales Tax

53
Motives for Bailouts Alternate

• Profit
• Predatory investor buys shares of faltering
  corporation at below-market price
• Social Improvement
• Philanthropist turns insolvent for-profit
  corporation into non-profit entity
• Socioeconomic Emergency
• US government gives funds to airline industry
  because transportation is too big to fail

54
Past Corporate Bailouts
55
Timeline of Corporate Bailouts

• 1970 Penn Central RR Philadelphia
• 1971 Lockheed California
• 1974 Franklin National Bank New York
• 1979 Chrysler Detroit
• 1984 Continental Bank Illinois
• 2008 Auto Industry Detroit
• 2008 TARP New York

56
Chrysler 1979

• Detroit in financial crisis
• Mayor Coleman A. Young
• Chrysler employs 37K Detroiters
• Provides 7 of citys total employment
• Failure would double unemployment to 20
• Impact on budget would be severe
• Could have similarly devastating effect on other
  cities

57
Chrysler 1979

• Michigan also suffering from worst recession
  since Great Depression
• Governor William G. Milliken
• Chrysler paid 2.4B in wages in MI in 1978
• Paid an additional 2.4B to MI-based suppliers
• Failure would throw 165K MI people out of work
• Would cost MI more than 200M in annual revenue
• Would raise welfare costs by 460M

58
Advantages of Corporate Bailouts
59
Advantages of Corporate Bailout

• Prevent corporate migration
• Increase jobs (or at least prevent job loss)
• Increase revenue through taxation
• Corporate income tax
• Personal income and property tax
• Stimulate local spending
• Sales tax

60
Advantages of Corporate Bailout

• Avoid moral hazard of direct municipal bailout
• Municipality will not rely on direct federal
  bailouts, instead focus on economic growth
• Limited ability to increase taxes due to taxpayer
  flight
• Can limit need for direct bailout
• Corporate assistance not a complete sunk cost
  can offset future direct bailout.
• Slows regional economic downturn

61
Disadvantages of Corporate Bailouts
62
Disadvantages of Corporate Bailout

• Municipal assistance dependent on success of
  corporate bailout
• Municipal benefits down-stream from corporation
• More preventive than restorative
• Bailout can prevent municipal insolvency, but
  once insolvent, hard to cure through corporate
  bailout

63
Disadvantages of Corporate Bailout

• Encourages inefficient corporate behavior
• Municipality would rather have efficient
  companies because bailouts may not always be
  available
• Distorts credit markets for corporate debt
• If the Administration makes private credit
  available to one privileged firm, the supply of
  credit that is available for all will be
  reduced. Alan Greenspan, Nixon economic advisor
  during Lockheed bailout

64
Conclusions

• In the short run, some benefits to municipality
• Should create jobs and stimulate local economy
• Should increase revenue through larger tax base
• In the long run, not sufficient to revive a
  struggling municipality
• Success depends on management and allocation of
  funds outside of municipalitys control
• Corporate bailouts better as preventive measure
• Bailed out corporation can help prevent municipal
  insolvency that could be caused by failed
  business

65
OPTION 4

• Federally Funded Municipal Infrastructure Projects

66
Infrastructure What are we talking about?

• Question
• If the federal government is to intervene, how
  should they do so to (1) resolve a current crisis
  and (2) prevent a reoccurrence of the problem?
• Option Provide Money for Infrastructure
• Offset municipal budget expenditures on
  infrastructure they need or would otherwise want.

67
Federally Funded Infrastructure Spending

• Shovel Ready Projects
• Municipal spending funded and directed by the
  federal government
• Government infrastructure projects

68
Shovel Ready Spending

• The federal government provides money to the
  states, cities, and other municipalities for
  projects that they prepared to start, but for the
  lack of funds
• The bulk of proposed projects are roads or
  sewers, but proposals also include neon signs and
  a frisbee golf course
• There is the potential to create 1.6 million jobs
  with these projects

69
Infrastructure Spending in the Stimulus Bill

• 40.6 billion to balance education budgets,
  prevent cutbacks and modernize schools
• 6.3 billion in energy efficient grants to state
  and local governments
• 5 million in grants to states for low-income
  housing projects in lieu of credits
• 69 million for energy projects in lieu of
  credits

70
Infrastructure Spending in the Stimulus Bill

• 61.8 billion for transportation and housing,
  which includes
• 29 billion in grants for highway improvements
• 8.4 billion for public transit improvements and
  infrastructure investments

71
Intended Effects on Municipalities

• Initial Effects
• Local economic stimulus job creation, business
  growth
• Less money spent from state or city budgets
• Long Term Effects
• Energy efficiency lowers city bills
• Environmental improvements lowers government
  health costs
• Multiplier Effects
• Analysts say every 1 billion spent on
  transportation projects creates 35,000 jobs
• Eliminating traffic congestion that cuts into
  worker productivity, delays deliveries, eats up
  gasoline and boosts air pollution

72
Cases Infrastructure Spending

• Works Progress Administration
• Hoover Dam

73
Works Progress Administration

• 11.4 billion (about 175 billion in 2008
  dollars)
• 4 billion on highway
• 2 billion on public buildings and utilities.
• Direct Economic Benefits
• 8.5 million people to work between 1935 and 1943
• Indirect Economic Benefits
• Built 651,087 miles of roadway
• Built or improved 124,031 bridges
• Constructed125,110 public buildings
• Laid 853 airport runways

74
Hoover Dam

• Costs
• 49 million (782 in 2008)
• Repaid from power revenues by 1987
• Maintenance 25 million in 1987 for flood
  control
• Direct Economic Benefits
• Employed 21,000 men (5522 from Nevada)
• AZ and NV receive 300,000 annually in lieu of
  taxes
• Indirect Economic Benefits
• Tourist Trap
• Provides electricity to the Southwest

75
Advantages of Municipal Infrastructure Spending
76
Cities Want to Improve Infrastructure

• Need to improve infrastructure
• 1 out of every 4 bridges is either structurally
  deficient or functionally obsolete
• America's drinking water infrastructure is
  underfunded
• Highway congestion costs us 78 billion annually
  through the 4.2 billion hours and 2.9 billion
  gallons of gasoline we waste each year
• States lack funds to help municipalities
• 43 states say they need to cut spending or
  increase taxes this coming year

77
Public Support Makes Easier to Enact

• Does not exclusively reward cities that make
  poor fiscal choices
• All cities appear to be treated equally
• Public more willing to support bailout of
  municipality that is framed in terms of
  infrastructure
• People think they benefit as much as others

78
Disadvantages of Municipal Infrastructure Spending
79
Possibility of creating inefficient infrastructure

• Creates incentives for cities to request an
  unnecessary amount
• In the short run it creates jobs and stimulates
  local business
• Can result in increased
• High maintenance costs
• Traffic congestion
• Pollution
• Increased cost of commuting
• Dependence on foreign oil
• Increased susceptibility to damage from natural
  disasters
• Cities may have to pay for these long term
  effects

80
Unintended Consequences Hoover Dam and TVA
exacerbating flood control issues?

• That devastating floods keep happening despite
  all the engineers efforts has led to a
  significant shift in philosophy in recent years.
  Many experts have come to believe that many past
  flood-control effortshave been
  counterproductive, or at least self-defeating.
• How much does it matter that efforts are seen as
  counterproductive 60-70 years later?
• Unknown how much the federal government will
  provide in disaster relief

81
Limitations on Federal Funding Some projects
require too much lead time

• Energy Efficient Buildings
• If the goal is to save states money, by having
  schools or other municipal buildings that use
  less energy, this will not completely begin until
  the project is finished.
• Rail systems
• If we are trying to make commuting more
  affordable or make money from tickets, this
  requires finishing the project.

82
Limitations on Federal Funding Administrative
Inefficiencies

• Except as otherwise provided in this chapter,
  the Federal share payable on account of any
  project on the Interstate Systemshall be 90
  percent of the total cost thereof, plus a
  percentage of the remaining 10 percent of such
  cost in any State containing unappropriated and
  unreserved public lands and nontaxable Indian
  lands, individual and tribal, exceeding 5 percent
  of the total area of all lands therein, equal to
  the percentage that the area of such lands in
  such State is of its total area except that such
  Federal share payable on any project in any State
  shall not exceed 95 percent of the total cost of
  such project. 23 USC 120(a)(1).

83
Conclusions

• Will create jobs in the short run
• Increases tax revenue
• Infrastructure can have significant long term
  effects
• Well planned infrastructure can decrease fixed
  energy costs
• Poorly planned infrastructure can lead to
  increased maintenance and other costs
• Value depends on
• Need for short term stimulus
• How well planned the infrastructure is

84
CONCLUSION

• The Municipal Problem

85
Summary Chart
86
BIBLIOGRAPHIES

• Works Cited

87
BIBLIOGRAPHY Introduction

• 2002 Census Report, U.S. Census of Government
  http//www.census.gov/prod/2005pubs/gc021x2.pdf
• 2007 Census Organization Phase Report , U.S.
  Census of Government http//www.census.gov/govs/w
  ww/cog2007.html
• 84 of cities in money trouble
  http//money.cnn.com/2009/02/04/news/economy/city_
  troubles/

88
BIBLIOGRAPHY Municipal Bankruptcy

• Michael W. McConnell Randal C. Picker, When
  Cities Go Broke, A Conceptual Introduction to
  Municipal Bankruptcy, 60 U. Chi. L. Rev. 425
  (1993)
• Omer Kimhi, Reviving Cities Legal Remedies to
  Municipal Financial Crises, 88 B.U. L. Rev. 633
  (2008)
• Frederick Tung, After Orange County Reforming
  California Municipal Bankruptcy Law, 53 Hastings
  L.J. 885 (2002)
• Nicholas B. Malito, Municipal Bankruptcy An
  Overview of Chapter 9 and a Critique of the
  Specifically Authorized and Insolvent
  Eligibility Requirements of 11 U.S.C.A. 109(c),
  17 J. Bankr. L. Prac. 4 Art. 2 (2008)
• http//www.dlapiper.com/overview_chapter_9/
• http//query.nytimes.com/gst/fullpage.html?res9D0
  CE5DE1531F937A15754C0A967958260
• http//www.iht.com/articles/ap/2008/05/25/america/
  Vallejo-Budget-Crisis.php
• http//money.cnn.com/2008/10/13/news/economy/Birmi
  ngham_brink_Whitford.fortune/index.htm
• http//www.msnbc.msn.com/id/28543545/
• http//www.accessmylibrary.com/coms2/summary_0286-
  11138307_ITM
• http//www.nwcn.com/statenews/idaho/stories/NW_022
  608IDN_mccall_bankrupt_LJ.2e326f72.html
• http//www.erisk.com/Learning/CaseStudies/OrangeCo
  unty.asp
• http//www.ppic.org/content/pubs/op/OP_398OP.pdf
• http//www.freerepublic.com/focus/f-news/2179765/p
  osts
• http//money.cnn.com/2009/02/04/news/economy/city_
  troubles/

89
BIBLIOGRAPHY Direct Bailout

• Joshua Brustein, The Fiscal Crisis After 30 Years
  10 October 2005, Gotham Gazette
  http//www.gothamgazette.com/article/issueofthewee
  k/20051010/200/1612
• Edward M Gramlich, New York Ripple or Tidal
  Wave? The New York City Fiscal Crisis What
  Happened and What is to Be Done? 66 American
  Economic Review, 66 415-429 (1976).
• David S. Kidwell and Charles A. Trzcinka, The
  Impact of the New York City Fiscal Crisis on the
  Interest Cost of New Issue Municipal Bonds,18
  Journal of Financial and Quantitative Analysis
  381 (1983).
• New York City's Fiscal Problems A Long Road
  Still Lies Ahead, Comptroler General Report to
  the Congress of the United States (Oct 31, 1979)
  http//archive.gao.gov/f0902a/110741.pdf
• Statement of Elmer B. Staats Comptroller General
  of the United States before the Committee on
  Banking, Housing and Urban Affairs, United States
  Senate on The New York City Seasonal Financing
  Act of 1975 (Apr 2, 1976). http//archive.gao.gov
  /f0202/094641.pdf
• Rona B. Stein The New York City Budget Anatomy
  of a Fiscal Crisis, Federal Reserve Bank of New
  York Quarterly Review, 1 (Winter 1976)
  http//www.newyorkfed.org/research/quarterly_revie
  w/1976v1/v1n1article1.pdf
• Time Magazine Coverage
• How New York City Lurched to the Brink, Time (Jun
  16, 1975) http//www.time.com/time/magazine/artic
  le/0,9171,917521,00.html
• How to Save New York, Time (Oct 20, 1975)(
  http//www.time.com/time/magazine/article/0,9171,9
  46554,00.html
• One Step Back from the Brink, Time (Nov 24,
  1975) http//www.time.com/time/magazine/article/0
  ,9171,913719,00.html
• Whipping Up a Stew of Taxes, Time (Dec 1, 1975)
  http//www.time.com/time/magazine/article/0,9171,9
  13767,00.html
• Last Minute Bailout of a City on the Brink, Time
  (Dec 8, 1975) http//www.time.com/time/magazine/a
  rticle/0,9171,947546,00.html

90
BIBLIOGRAPHY Corporate Bailout

• Adams, Walter and James W. Brock. Corporate
  Size and the Bailout Factor Journal of Economic
  Issues, 211, 61-85.
• Omer Kimhi, Reviving Cities Legal Remedies to
  Municipal Financial Crises, 88 B.U. L. Rev. 633
  (2008)
• http//www.propublica.org/special/government-bailo
  uts
• http//uspolitics.about.com/od/economy/a/chryslerB
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• http//www.kitsapsun.com/news/2008/dec/09/auto-dea
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