Detroit, Chicago and three other U.S. cities fell into financial distress for a variety of reasons, according to analyses of financial data released yesterday, Reuters reported. The Center for State and Local Government Leadership at Virginia's George Mason University examined a handful of the most troubled cities, including Baltimore, which despite a population drop and high poverty levels is on a solid financial footing. Detroit, which filed for the biggest municipal bankruptcy in U.S. history on July 18, wound up in bankruptcy court due largely to its steep population drop, cuts in state aid and collapsing real estate values, the report said. The steep cuts to Chicago's credit ratings are rooted in large measure in its high labor costs, while San Bernardino in California is seeing tight times chiefly because of a flawed city charter and inhospitable state politics, the study found. The study noted Michigan's biggest city needs radical changes to its physical borders and governance, as well as shared services to succeed.
