2008-11-14 18:03:43
Should Major Cities Receive Bailout Money as Well?
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The mayors of four major cities in the United States - Philadelphia, Atlanta, Phoenix and San Jose - all made their voices heard earlier this week.
We'd like to be bailed out as well.
San Jose Mayor Chuck Reed indicated on Friday that he would be making a request of $14 billion dollars so that the city could "pay for mass transit improvements and expand the area's clean technology businesses."
He said "If the federal government is going to be doling out money, we'll be asking for our fair share. As the 10th largest city in the country, we should get at least 2 percent. That would be fair."
The mayors of Atlanta, Phoenix and Atlanta sent letters to the federal government, imploring them to remember the cities when money from the bailout package was being dished out.
The mayors requested loans that would help to pay pension costs, as well as $50 billion dollars in loans that would go towards infrastructure investments. Also, the mayors requested that short-term loans be made available to cities who weren't able to borrow needed money because of the credit meltdown.
Many cities in the United States are suffering from an alarming drop-off in revenues, which has been caused by lowered business and real estate tax revenues. This has led to budget shortfalls, which has in turn led to cities needing to reduce city services.
The mayors shouldn't hold their breath though - a spokeswoman for Treasury Secretary Henry Paulson said that the intent of the bailout package wasn't to help out cities, but instead to stabilize the banking system.
Besides - how could you approve a bailout of Atlanta, San Jose, Phoenix and Philadelphia and not help out every other city in the United States? Cities such as New York are struggling mightily, and they would undoubtedly ask for assistance as well if other cities received money from the bailout fund.
This is obviously a very messy situation on the economic front, with a wide variety of banks, cities and other companies (including GM) asking for help. It will be very interesting to see who ends up receiving help over the next 12-18 months.
Filed under: The Economic Meltdown
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