It was 1975 and New York City was running out of cash. Its excessive spending and lack of financial oversight created a $14 billion debt.
A request for a bailout from the federal government, headed by President Ford, didn’t happen, which sparked the famous New York Daily News headline “Ford to City: Drop Dead.”
The state of New York took action. That landmark process has become a primer for other entities to follow in keeping out of bankruptcy.
“It’s a well-regarded credit now,” municipal bond manager Tom Dalpiaz said; he’s senior vice president of Advisors Asset Management in Colorado. “New York’s budgetary process is very strong. They keep track of it, have projections and know when they are going to run into trouble.”
But before arriving at a disaster point, municipalities can employ a variety of strategies to stay solvent…..
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