A website on Tuesday published an article from a member of the Wall Street Journal editorial board highlighting that Gulf County ranks high among his “worry list” of potential municipal bankruptcies.
The article, by Stephen Moore, a senior economics writer, and published on the Newsmax website, examines factors that led to the recent declaration of bankruptcy by the city of Detroit.
Moore lists 20 cities that may face bankruptcy after Detroit.
Coming in at No. 4, below only the California cities of Fresno and Compton as well as East Greenbush, NY, is Gulf County.
Moore’s list is based on bond ratings and other data.
He calls the list the “top 20 cities to watch for financial troubles in the wake” of Detroit.
Moore writes that the 61 largest U.S. cities have amassed $118 billion in unfunded healthcare liabilities, legal promises to pay healthcare to municipal workers beyond the contributions of those employees.
Moore warns about pension fund responsibilities in major cities such as Chicago and several California cities and said many cities and counties have similar long-term intractable financial issues similar to Detroit, such as obligations to retired workers for health care and pensions.
He also writes that states and the federal government are unlikely to be of much help in bailing out troubled cities and counties.
Moore blames much of this on 20 years of governance in major cities that has included high taxes on the rich; super-minimum wage rules; failing schools with little competition or productivity; strict gun-control laws he argues leads to higher crime rates; crony capitalism; and regulations onerous to businesses and private development.
In Gulf County, several factors are noted by Moore.
Fitch Ratings, an international financial rating service, warned that Gulf County’s predominately rural economy is “narrowly focused” without a broad base.
Income levels in the county are one-quarter below national averages. Economic indicators for the county also compare unfavorably to national averages, Moore writes.
Gulf County is not alone in the neighborhood.
At No. 7, Moore lists Jefferson County, Ala, which is the home to Birmingham.
The county filed for bankruptcy protection in 2011 over a sewer bond debt and has been dealing with the collapse of refinancing that sewer bond debt, Moore writes.
The list also includes the Philadelphia city school district and a host of cities sprinkled across the Midwest, West Coast and Northeast.