Providence, RI- Mayor Angel Taveras warned that the city was
close to going bankruptcy in June if they cannot cut their deficit.
Traveras, a Democrat, said that the city cannot afford the
annual raise on retiree benefits; about 600 people receive a 5 to 6 percent
increase in benefits annually. He further stated that the benefits would be cut
either voluntarily or by court action.
Traveras managed to cut the budget deficit from $110 million
to $30 million in the current fiscal year. Despite the cuts Providence will run
out of money by June.
The mayor is also calling on non-profits, hospitals and
universities, to help the city in lieu of the taxes they are exempt from. Travers said he would support legislation
that would require non-profits to pay property taxes on land and buildings that
are not used for educational or medical related purposes.
Should Providence be forced to file for bankruptcy, the
effects would have a ripple effect throughout the state.
Municipalities and businesses alike have been adversely
affected by the struggling economy. In some instances their only hope for
survival is to turn to bankruptcy
attorneys to offer solutions.
A bankruptcy attorney
can evaluate the troubled businesses’ finances and determine if bankruptcy can
effectively reduce their debts and return to profitability or a balanced sheet.
Bankruptcy lawyers can shield the
business from their creditors and suggest the bankruptcy structure that will
work best for their needs.