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Thursday, January 27, 2011

Ind. Gov't. - "Bankruptcy bill moving forward"

Updating this entry from Jan. 24th headed "Law would let cities declare bankruptcy," Jon Seidel of the Gary Post Tribune writes today:

A distressed Hoosier government would need to pay the salary of its emergency manager under an altered Senate Bill 105 that left committee Wednesday, its author said.

Sen. Ed Charbonneau, R-Valparaiso, successfully sought several changes from the Senate's judiciary committee to his proposal for a reformed Distressed Unit Appeals Board.

The bill would give the DUAB power to appoint an emergency manager to sort out a local government's financial problems and try to avoid a municipal bankruptcy filing. However, it also creates a path to bankruptcy that doesn't currently exist for Indiana cities and towns.

The last time the committee met, several questions were left unanswered. Charbonneau said his amendment would "address most of the concerns," the biggest of which dealt with the ability of qualifying creditors to send a local government to the DUAB. Their ability to do so was written out of the bill.

"It was one of the real sticking points," Charbonneau said.

His bill would now give local governments a chance to appeal the DUAB's ruling after petitioning the board, and it would allow a mayor elected after the DUAB's decision to seek a suspension of that ruling so the new executive has a chance to work things out.

Finally, Charbonneau said the new bill wouldn't be effective until July 1, and he said it would not apply to any pending petitions before the DUAB. Gary is the only city that is petitioning the board. It also did so in 2009 and 2010. * * *

The judiciary committee endorsed the bill in a 9-0 vote. It now moves to second reading in front of the full Senate, where it could be amended further.

[More] Here is a story from the Jan. 26th NY Times headed "New York State Takes Control of Nassau’s Finances." David M. Halbfinger's story begins:
UNIONDALE, N.Y. — A state oversight board has seized control of Nassau County’s finances, saying the wealthy and heavily taxed county had nonetheless failed to balance its $2.6 billion budget despite months of increasingly ominous warnings.

The 6-0 vote here on Wednesday afternoon by the Nassau County Interim Finance Authority gives it veto power over the county’s budget, labor contracts, borrowings and other major financial commitments.

The board cited a deficit that reached nearly $350 million at one point last year but that was not fully closed, it said, despite assurances to the contrary by the county executive, Edward P. Mangano, a Republican.

It was only the second time a county had been taken over by New York State. The first was Erie County, the state’s 24th wealthiest county, where the median household income is half that of Nassau’s, New York’s richest county. The control period in Erie ended in 2009.

The move effectively puts the finance authority board, a six-man panel of state-appointed financial experts and other professionals, at the bargaining table opposite Nassau’s civil servants, police officers and other labor unions.

Posted by Marcia Oddi on January 27, 2011 08:56 AM
Posted to Indiana Government