Mitch Berg takes note of the LGA situation in Minnesota and explains it nicely:
As we pointed out last year, Local Government Aid – which started out as an attempt to help small, poor rural towns build critical infrastructure like roads
and water treatment plants – has become a money-laundering scheme for large, DFL-controlled cities, enabling to shift their spending from their own property tax payers to the rest of the state – especially the parts of the state that pay full taxes, but receive no LGA (most of the state’s top-forty cities, mostly third-tier, GOP-leaning suburbs).
These third-tier suburbs, or rather the residents of these suburbs, are also the chief target for Mark Dayton's plan to cover the much-touted $6.2 billion deficit. It's not going to happen, at least the way Dayton thinks it should.
Meanwhile, at the next level, financially derelict states are looking for help from the Feds. That may not be coming, either:
[House Majority Leader Eric] Cantor flatly rejected any changes in the law that would allow state governments struggling with record budget deficits brought on by the economic recession and rising pension costs to restructure debt, including allowing them to declare bankruptcy.
“I don’t think that that is necessary, because state governments have at their disposal the requisite tools to address their fiscal ills,” the majority leader said, before going a step further.
“I think some ... have mentioned this Chapter 9 equivalent for states is somehow going to stave off some kind of federal bailout — we don’t need that to stave off a federal bailout. There will be no bailout of the states,” Cantor said. “States can deal with this and have the ability to do so on their own.”
Tough love? Of course it is. But necessary, too. It's silly to imagine that there's some way that the plutocrats of Lake Minnetonka and the robber barons of North Oaks or the Scrooge McDucks of Sunfish Lake are going to be able to finance the messes that governments at all levels have made. The Feds surely don't have the money, either, which we've been borrowing from the Chinese, who are likely looking down on us because they are sitting on a bubble.
We've been spending money like crazy people, at all levels of government, for the better part of a century now. Plenty of people have known this, but we've been kicking the can down the road for a long time. I've been listening to politicians talk about making hard choices for most of my adult life, but I haven't seen too many who have actually made any. Well, the time has come. And don't expect the swells to pay, because they don't have the money, either.
The bailouts that are expected aren't about money as much as they are about avoiding accountability. But there's accountability all around. It belongs to the governmental entities at all levels who made promises they had no reason to believe they could keep, and it belongs to the citizens who either voted for the profligates or didn't bother to pay attention to what was happening. That means we all own it, but it has to stop. Everyone is getting a haircut, and soon. It's going to look like Camp Lejeune around here pretty quick.