Flanders emerging as leading national proponent of Chapter 9March 30th, 2012 at 8:59 am by Ted Nesi under Nesi's Notes, On the Main Site
Flanders flatly told a Bloomberg reporter there this week he sees no way Providence can avoid bankruptcy, a comment that appeared to leave Mayor Angel Taveras aghast – even though Flanders is advising him.
“I was surprised and I disagree,” Taveras told WPRI.com on Thursday when asked about Flanders’ remarks. “Providence is not Central Falls. I will do everything in my power to avoid that.”
“Providence,” the mayor repeated, “is not Central Falls.”
Maybe not, but Flanders is now a true believer in the power of letting cash-strapped municipalities file for bankruptcy under Chapter 9 of the federal code. The Huffington Post’s Matt Sledge reports on what Flanders told attendees at a Bond Buyer conference in Pennsylvania’s capital:
From the comments of Flanders and others at the municipal bonds conference, it seems like the industry is in agreement about one thing going forward: someone is going to have to suffer, and it shouldn’t be bondholders. And the draconian measures needed to stave off financial disaster will often require an unelected official – be it a receiver in Rhode Island or an emergency manager in Michigan – to assume near-dictatorial powers.
Bankruptcy, Flanders said, should no longer be a dirty word. Sometimes it’s the only way to extract concessions from public employees unions and retirees, who he said weren’t very happy when he first proposed slashing pensions by 50 percent. …
It was only bankruptcy’s provisions that let Flanders, as city receiver, actually go through with those cuts, he noted. “We could blow up any contract we liked.”
Public employees’ concerns should be balanced, he argued, against the investors whose money allows cities to operate.
Read the rest here. All this comes as Taveras continues to struggle in Providence, Woonsocket prepares to slap a 13% midyear tax hike on its residents, and Governor Chafee is beating the drum for his far-reaching package of municipal-relief legislation. Chafee will discuss his proposal on “Newsmakers” this weekend.
HuffPo isn’t the only left-leaning publication covering Providence’s financial troubles, either. The Nation’s Erin Schikowski, who attended Taveras’s retiree town hall earlier this month, filed a story giving an overview of the situation on TheNation.com this week, too.