A proposal in the Illinois House would let cities and towns declare bankruptcy, Northern Public Radio reported today. Many municipalities say that they are struggling to pay for local police and fire pensions. Backers of bankruptcy say it would give mayors more leverage in negotiating with unions. Rep. Ron Sandack said that it ought to give cities more tools to fix their own finances, adding that letting cities threaten bankruptcy would give them more leverage in dealing with unions. Sandack said that even in bankruptcy, cities would still have to negotiate contract changes.
