Philadelphia Goes the Way of California

In the latest sign that the nation's municipalities are hurtling towards an uncomfortable sort of insolvency, the City of Philadelphia announced via press release(below) that it has been forced to halt all expenditures other than employee compensation, debt service, and emergencies. Officially, the city is blaming it's woes on Pennsylvania's inability to overcome a California-like budget impasse. States, despite being the beneficiary of a nearly 1/3 slug of the recent Obama stimulus, can not seem to get their fiscal houses in order - in part due to the fact that they are not permitted to monetize deficits like Washington regularly (always?) does. This reality begs the question: what will States do next year absent massive cash transfers from Uncle Sam?

Philadelphia Budget Crisis Press Release Sphere: Related Content