Municipalities in fiscal distress may seek to adjust debts under Chapter 9 of the Bankruptcy Code either because they are truly destitute or because they lack the political will to adopt affordable tax increases. Local officials of municipalities that enter bankruptcy proceedings nevertheless...

Local governments often enjoy "home rule," in the sense that they are able to initiate legislation concerning municipal affairs without obtaining the prior consent of the state legislature. At the same time, these localities often are able to exercise limited discretion over revenue raising. In...