It begins;
BIRMINGHAM, Ala. — It is hardly unusual these days for a government building to forgo a fresh paint job or regular lawn care to cut costs. But last week, the director of the Jefferson County public nursing home was told that the county could no longer afford to bury indigent patients.
Across town at the juvenile detention center, the man in charge was trying to figure out how to feed the 28 children in his custody when the entire cafeteria staff is let go. The tax collector warned local school districts to expect a six-month delay to get their share of property taxes. In family court, administrators plan to delay child support, custody and child abuse cases, leaving some children in the hands of the state indefinitely.
and goes on to detail the economic destruction of the county government and all its services to the taxpayers.
Then it details the steps that got them there.
Some of the county’s woes stem from the financial crisis that has pounded so many communities: its sales and property tax revenues are down by $40 million, and it borrowed billions in a sewer bond boondoggle that is the municipal equivalent of a subprime mortgage, using failed exotic bond deals and swaps concocted by investment bankers.
But the county has additional troubles: the sewer project was riddled with corruption, and in January a court ruled that a tax the county relied on for more than a quarter of its general fund was illegal because the Legislature repealed it in 1999.
and lets not leave out the derivitive fantasy enrichment schemes..
The county ended up with 18 different swaps at one point, an extraordinary number for a county government. The notional value of the swaps surpassed the value of the bonds they were supposed to hedge.
Mr. Langford agreed to the plan — and in the process locked Jefferson County into borrowings that may ruin the county, even though they have richly rewarded its bankers.
Last week, the county warned that it did not have enough money to cover the hedges, which ended up costing it money when rates moved in unexpected ways. The situation became critical when the insurance companies standing behind the bonds had their own credit ratings downgraded. Officials are trying to work out a stabilization plan, but the outcome is far from certain.
and of course now the county and state politicions ae wondering if they should attend town hall meetings or not becaue the people are not as stupid as the politicians thought they were.
The general attitude, not surprisingly, was one of indiscriminate disgust. Neither the commissioners, nor the legislators nor Wall Street escaped blame.
“The big dogs ate all the bones,” said Mansoor Butt, 55, a store owner. “Now we are all out of bones. The chips are gone, and the poker game’s gone. You can’t play poker without any chips.”
Quotes taken from two articles. one old,
older article
and
todays times
