Camden, two other New Jersey towns, among nine U.S. cities going broke
Erin Wright, Y! Local
While President Obama and the assorted GOP contenders for the 2012 presidential nomination push their ideas for getting the country back in the black, there are some U.S. cities and counties on the brink.
An analysis by 24/7 Wall St. examines the nine municipal bodies with the worst credit ratings assigned by Moody's, not including school systems, rated Ba2 and lower. (For perspective, Moody's rates junk bonds as Ba1.)
Coming in at No. 9 on the list is Camden. The city has been beset with money issues for quite a while, highlighted by a mass layoff of its police officers and firefighters earlier this year. The city collected $181,257,000 in revenue in 2009, but was in debt to the tune of $103,284,000 during that same year.
Moody's notes that "more than half of Camden's real estate is tax-exempt, hampering already weak tax collections." The city has had a speculative grade credit rating since 1998. And it doesn't help that three out of the past five Camden mayors have been sent to prison for corruption, the most recent in 2001.
Camden isn't the sole Jersey city on the list. It is joined by Salem and Harrison, coming in at Nos. 6 and 4, respectively. Both towns have stumbled financially in part because of bad investments.
Salem built a large office building downtown with the intention of leasing office space. But construction delays caused lease payment delays and money has been taken from the debt fund numerous times.
In 2010, Harrison built the $200 million Red Bull Arena. The venue cost the city $39 million in debt but has yet failed to have the expected returns. To help solve its debt problem and inch toward recovery, the city has drawn inspiration from Camden and plans to fire some police officers and firefighters.
Aside from the cash-flow issues, the nine struggling locales on the list have little in common -- even the reasons they are going broke are vastly different. Central Falls, R.I., which tops the list, is in the red due to a bloated pension plan. Strafford County, N.H., spent two-fifths of its budget on a single nursing home. And Detroit was the victim of a tanking economy that saw several major employers, such as Chrysler and General Motors, declaring bankruptcy and residents leaving to find work and homes elsewhere.
The full list:
1. Central Falls, R.I.
2. Pontiac, Mich.
3. Jefferson County, Ala.
4. Harrison, N.J.
5. Detroit, Mich.
6. Salem, N.J.
7. Riverdale, Ill.
8. Strafford County, N.H.
9. Camden, N.J.
