The COVID-19 pandemic has hit many cities hard, causing revenue losses, budget cuts, and service reductions. Some cities are facing the risk of bankruptcy, which means they cannot pay their debts or provide essential services to their residents. Here are 10 cities that are in serious danger of financial collapse.
Chicago is the third-largest city in the US, but it also has the largest pension debt among major cities. The city owes more than $30 billion to its retired workers, and it has not been able to fund its pension plans adequately. Chicago also faces high crime rates, population decline, and rising taxes.
Detroit was once the booming center of the US auto industry, but it has been struggling for decades with poverty, unemployment, crime, and corruption. In 2013, Detroit became the largest US city to file for bankruptcy, after accumulating more than $18 billion in debt.
San Juan is the capital and largest city of Puerto Rico, a US territory that has been mired in a debt crisis since 2015. Puerto Rico owes more than $70 billion to its creditors, and it has been unable to repay its obligations. San Juan suffers from high poverty, unemployment, crime, and power outages.
Los Angeles is the second-largest city in the US, and it is known for its entertainment, culture, and diversity. The city has a budget deficit of more than $500 million for the fiscal year 2021-2022, and it may have to cut services or raise taxes to balance its books.
The city spends more than $90 billion per year on various services and programs, but it also relies heavily on tax revenues from tourism, business, and entertainment. leaving the city with a projected budget gap of more than $4 billion for the fiscal year 2022-2023.
Houston is the fourth-largest city in the US, and it is a major hub for energy, aerospace, and healthcare industries. However, the city also has a chronic budget problem, mainly due to its pension obligations and revenue limitations. The city owes more than $6 billion to its pension funds, and it has a revenue cap that limits its ability to raise taxes.
The city has a poverty rate of more than 20%, one of the highest among large US cities. The city also has a large debt burden of more than $11 billion, and it faces rising costs for education, public safety, and health care.
New Orleans, Louisiana
New Orleans is a famous tourist destination and cultural center in the US South. However, the city also has a fragile economy and infrastructure that are vulnerable to natural disasters and climate change. The city was devastated by Hurricane Katrina in 2005, which caused massive flooding and damage.
Las Vegas, Nevada
The COVID-19 pandemic has severely affected these industries, causing massive job losses, business closures, and revenue declines. The city has a budget shortfall of more than $100 million for the fiscal year 2021-2022, and it may have to reduce services or lay off workers to cope with the crisis.
The city also has to provide services to millions of visitors and federal workers who do not pay local taxes. The city has a budget surplus of more than $500 million for the fiscal year 2020-2021, but it also faces uncertainty and volatility due to the changing political climate and federal policies.