Once the unassailable epicenter of American auto manufacturing as well as the birthplace of one of the most successful music labels of all time — Motown — the city of Detroit has just made history that will this time go down infamy: they became the largest municipality in U.S. history to file for bankruptcy. Detroit, on the fiscal decline for years which was exacerbated by the Great Recession and a crippling scandal that cost the city millions, had long ago appointed an emergency financial manager for the city as it was besieged with crippling debts totaling an estimated $18 billion.
While Detroit is highest-profile municipality to get buried under mountainous debt, the Motor City is hardly alone. Many local governments across the U.S. face steep budget deficits as they struggle to pay off debts accumulated over a number of years. As a last resort, some cities and towns filed for bankruptcy in the past few years. Multiple municipalities have filed for bankruptcy inside some cities, including Omaha, Neb.
Overall, bankrupt municipalities remain extremely rare. A Governing analysis estimated estimated only one of every 1,668 eligible general-purpose local governments (0.06 percent) filed for bankruptcy protection over the past five years. Excluding filings later dismissed, only one of every 2,710 eligible localities filed since 2008.
Look at the cities, towns and counties that have filed for bankruptcy since 2010: