HAMTRAMCK, Michigan - Leaders of this city met for more than seven hours on a Saturday not long ago, searching for something to cut from a budget that has already been cut, over and over.
This time they slashed money for boarding up abandoned houses , said William J. Cooper, the city manager. They shrank money for trimming trees and cutting grass on hundreds of lots that have been left to the city.
“We can make it until March 1 - maybe,” Mr. Cooper said of the town’s ability to pay its bills.
Beyond that? The political leaders of this old working-class city near Detroit - where immigrants have arrived in waves from Germany, Poland, Bosnia, Albania, Bangladesh, Yemen and more - are pleading with the state to let them declare bankruptcy, a desperate move the state is not even willing to admit as an option under the current circumstances.
Bankruptcy, increasingly common among corporations and individuals, remains rare for municipalities. Local leaders who want to win elections find it unappealing and often have other choices for solving financial woes.
Yet with anemic property tax revenues and forecasts of more dire financial times ahead, some experts and elected leaders fear that more localities may have to at least consider bankruptcy.
“There could be many cities in this position,” said Summer Hallwood Minnick, director of state affairs for the Michigan Municipal League . “ They’re down to four-day workweeks and the elimination of parks, senior centers, all of that. So if there’s anything else that happens, they will be over the edge.”
Only about 600 cities, counties, towns and special taxation districts have filed for bankruptcy since 1937, said James E. Spiotto, a municipal bankruptcy expert at Chapman & Cutler, a law firm in Chicago, and fewer than 250 in the last three decades. Some states have no specific provision allowing cities to pursue bankruptcy, and at least one, Georgia, bans such moves.
About 15 municipalities pursued bankruptcy in the last two years. But 2011 might bring a rise in cities faced with such a fate.
Here in Hamtramck, all 5.5 square kilometers of it, all attention has turned to a realm that is emerging at the center of budget debates around the United States: the salaries, benefits and pensions of public workers.
Mr. Cooper says the city ‘s 75 police officers and firefighters and about 240 former workers and spouses who are now on pensions “ kind of have the Cadillac plan, and we’d kind of like the Chevy.”
And now a new fear is bubbling up: that Hamtramck may ultimately disappear (either through bankruptcy or, simply, default) and wind up sharing services with or becoming a part of Detroit .
“We’ve trimmed every bit of fat,” said Shannon Lowell, the co-owner of a coffee shop. “What else are we going to do? Borrow money from our dying grandmother?”
By MONICA DAVEY
