Is Dallas Going Bankrupt?
Dallas and bankruptcy are two words you normally wouldn’t find in the same sentence. After all, Texas is practically recession-proof and Dallas has one of the fastest-growing economies among large cities in the U.S.
But Dallas Mayor Mike Rawlings says his city may be “walking into the fan blades” of bankruptcy. It all comes down to pensions for public safety workers. Big promises to pensioners and risky investments have left the fund almost $7 billion in debt, and it’s seeking a bailout from the city.
According to Mary Williams Walsh of the New York Times, Dallas had the equivalent of a bank run this past summer. Although a pension fund is not a bank, their fund did have a feature that allowed pensioners to pull out large amounts of money on demand, once they were a certain age. Due to concerns about investments, many began withdrawing from their accounts in high numbers, which left too little for the regular part of the benefit.
“There’s been concern about investments there for a long time … and it all sort of came to a head over the summer,” Walsh says. “They got some new numbers and people started feeling like ‘No, my money is not safe there.’ It was sort of rumor-driven also – maybe some exaggerations or something. But, I mean, a pension fund is not set up to take a hit like that all at one time.
Read more: http://kut.org/post/dallas-going-bankrupt
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