Even while we see jobs coming back, the tsunami created by the Great Recession is hitting cities and counties with full force. Suffolk County, one of the largest New York counties, has declared a financial emergency. Stockton, Calif., a city of 300,000, is on the verge of bankruptcy.
As the cities go belly up, the 1 percent are back. A new report by Emmanuel Saez, the nation’s leading academic expert on income inequality, shows that the top 1 percent captured a staggering 93 percent of all the real income growth in 2010. The bottom 99 percent captured only 0.2 percent after losing nearly 12 percent from 2007-09. For the 99 percent, the loses in the Great Recession erased all income gains since the last recession in 2002.
In cities, the crisis is forcing harsh cuts in services. As New York City Mayor Michael R. Bloomberg put it, “Towns and counties across the state are starting to have to make the real choices — fewer cops, fewer firefighters, slower ambulance response, less teachers.”
Cities and counties could muffle the effect for a couple of years, but now, the day of reckoning is hitting — and hitting hard.
Lower property values, the result of the housing bubble crash, are now being registered in tax valuations. Millions were lost as the banks trampled the law while dodging recording and transfer fees on mortgages. Unemployment and poverty put greater pressure on budgets, particularly on health care through Medicaid. The losses suffered by pension funds force higher payments by public employers. The high unemployment economy generates lower sales and income tax revenues.
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SOURCE: Chicago Sun-Times