The Miami government’s continued tax and fee hikes indicate the city is bankrupt, says Mike Shedlock, an investment adviser at Sitka Pacific Capital Management.
“Miami is bankrupt. Unfortunately the city refuses to admit it,” he writes on the Business Insider website.
He quotes from a commentary by Michael Lewis (not the famous financial author) in the Miami Today newspaper.
“As you recoil from your tax warning notice today, ponder this: those multiple tax hikes aren't the only charges set to rise,” Lewis writes.
“Besides Miami-Dade County's plan to raise every taxpayer's rates 12.2 percent for operations and an incredible 56 percent for capital spending on undisclosed projects, it also plans to raise retail water and wastewater rates 5 percent.”
And there’s a bit of skullduggery here, Lewis says. “Though County Manager George Burgess proposed the 5 percent water and wastewater hikes, that's not because water and sewers are running in the red. They're already quite profitable,” he writes
“But by raising rates, the county can dip into water and sewer cash and add $25 million to its operating spending cache, while claiming it's keeping our cost down.”
Several other cities are in danger of bankruptcy too, and Los Angeles is one of them, according to its ex-mayor Richard Riordan.
“Unless we make dramatic changes, we could quickly spiral over a cliff, and literally everyone will be bankrupt,” he told CNBC.
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