Central Falls files for bankruptcy (RI)

[zeitgeist]

And now we get to see if a beheading is better than a haircut:

http://www.reuters.com/article/2011/08/01/us-rhodeisland-centralfalls-idUSTRE7703ID20110801

By Scott Malone

CENTRAL FALLS, Rhode Island | Mon Aug 1, 2011 4:47pm EDT

CENTRAL FALLS, Rhode Island (Reuters) - Central Falls, Rhode Island, one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession, filed for a rare Chapter 9 bankruptcy on Monday.

The bankruptcy filing, a risky and potentially expensive move that could freeze the city out of the U.S. municipal bond market, marks a symbolic blow as state and local governments struggle to pull themselves out of the recession.

{SNIP}

AND from  NPR

http://www.npr.org/2011/08/01/138884560/facing-bankruptcy-r-i-town-awaits-retirees-vote

August 1, 2011 The small and poor Rhode Island city of Central Falls will likely go into bankruptcy if it can't cut a deal with city workers and pensioners. The receiver running the city gave them two options: take the cuts to pension checks and health care benefits, or risk losing even more in bankruptcy court. Because bankruptcy judges can terminate union contracts, the receiver has warned them: "a haircut looks better than a beheading." Central Falls is expected to announce Monday whether a majority of retirees accepted the cuts or rejected them. Catherine Welch of member station WRNI reports.

Had not seen this posted anywhere but it is a story that should prove interesting no matter how it turns out.

[Eupher]

From the Reuters article:

"It's too bad, because Central Falls has always been a progressive city," said Ortiz. He added that he hoped the city would not be absorbed by one of its neighbors. "We've been here for more than a century," he said.

How's that hopey-changey thing workin' out for ya, pal?

[JohnnyReb]

I had an aunt and uncle that lived in R.I.. Their property taxes were high as the dickens 50 years ago. My uncle worked on the railroad and belonged to the union....though he was a Yankee and a union member, he had commonsense. He predicted today's problems 50 years ago. I guess he didn't know about the unlimited government credit card or his predictions would have been a little more accurate time wise.