From the Northwest Indiana Times:
After years of steep cuts and sweeping layoffs, Gary owes less to creditors than many towns a fraction of its size, according to the Indiana Department of Local Government Finance. The Steel City currently has about $8.4 million in outstanding debt for bonds, loans and leases, as well as utility and redevelopment projects. That's less than every other city and town in Lake County, except for New Chicago, Schneider and Winfield.
Last year, the state agency started collecting and publishing municipal debt figures online so the public can see how much local governments are borrowing, how much they owe in interest and how they are repaying the debt.
Only two cities in Indiana currently have less total debt per capita than Gary, according to Department of Local Government Finance records. One is Sullivan, which has a population of 4,200 and a single park. The other is Alexandria, which was designated "Small Town USA" by the Department of Defense in 1943 and has only added about 300 more residents in the seven decades that have since passed.
Mayor Karen Freeman-Wilson said the city's finances have been improving, despite a 55 percent reduction in property tax revenue brought on by the statewide tax caps. The city has cut expenses, avoided indebtedness and reduced Gary's overall debt burden significantly over the last several years.
"Our controller and the financial folks have worked very hard to reduce costs," she said. "There's been a tremendous reduction over the last five to seven years. We've had to focus more on reducing costs, generating revenue and leveraging what we have in order to do more with our internal resources."
Over the past few years, Gary often seemed to be teetering on the brink of financial ruin.
The city's tax base had eroded like the vacant storefronts along Broadway. Budgets were millions of dollars in the red. The tax caps threatened to choke off half the city's revenue overnight.
State auditors repeatedly questioned whether Gary city government could even remain a going concern. Indiana town governments have dissolved before.
Gary had to go before the Distressed Units Appeals Board three years in a row, while it cut spending to match the diminished income. Hundreds of city workers lost their jobs, and garbage collection was turned over to a private company.
Former Mayor Rudy Clay had said his top priority was keeping Gary out of bankruptcy. State Sen. Ed Charbonneau, R-Valparaiso, proposed changing state law to allow Indiana cities to file for municipal bankruptcy the way Detroit did.
Under current state law, Gary could not ask a judge for protection from creditors. Mark S. Zuckerberg, an Indianapolis attorney who blogs about bankruptcy issues, said cities with financial challenges such as Gary would benefit from being able to consolidate debt and get a fresh start.
"They wouldn't have dead weight weighing them down," he said. "It's easier to be fiscally responsible when you're not inundated with debt payments."
The city just laid off another 15 employees — emergency medical technicians this time — at the end of last year. Most city employees are being furloughed for 10 days this year.
Gary, however, already has retired much of its debt on projects like the U.S. Steel Yard, which was paid off in February 2011.
The city currently faces nowhere near the $18 billion in debt that has been smothering Detroit. The Motor City writes pension checks and provides health care to about 21,000 retired city employees, and those programs are believed to be underfunded by about $9.2 billion.
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http://www.nwitimes.com/business/local/gary-has-nowhere-near-the-debt-of-bankrupt-detroit/article_5eea1098-0fe6-5d65-82a4-8e7c805db425.html
