The has been a wave of discussion and critique of banking analyst Meredith Whitney and her predictions of a wave of defaults in municipalities.Warren Buffet has also voiced concern on this issue - (Buffett, Whitney 'Out of Their League' on Munis: Analyst).
Are they right? That's not the point. What is important is the terrible state of finances of governement at every level, and the refusal and or ignornace of politicians to deal with budget gaps. State and local governments might get through this situation, but only if the economy continues to improve and government spending is slashed. Tax increases are probably not an option anywhere given the national voter mood.
In my own state of Colorado, there is a commission formed of various state politicos, and they are proposing a series of tax initiatives, without dealing with the state government spending side of the equation. The can is still being kicked down the road, and being the betting man that I am, I would venture to guess that a tax proposal would be savaged by voters.
