A new, controversial list from the California Policy Center ranks the California cities most likely to default.
The list has sparked controversy, leading the group to include new disclaimers at the top of their municipal rankings.
“Any attempt to rank the financial health of a city, or any financial entity, will rely on criteria and formulas that are debatable. How much emphasis to place on historical performance, debt, unfunded liabilities, cash flow, general fund balance, budget deficits vs surpluses, interest and pension expense, and a host of other relevant data will inevitably result in differing results,” the group writes. “Nonetheless we believe the rankings we have come up with, based on the information we had to work with, would not have been substantially different, were we to have used alternative but credible systems of analyses.”
In other words, never let the facts get in the way of a good, sensationalistic story. And only half of the cities on the list have a greater than 1% chance of actually defaulting, according to the study. But it does offer a collection of cities that are facing some financial stress.
The cities that made the roster are all under various levels of financial pressure, even as the state’s economic picture continues to stabilize. Where did your city rank?
Here are the so-called Unlucky 13:
(1) COMPTON - Default Probability, 4.01%
(2) KING CITY - Default Probability, 3.38%
(3) SUTTER CREEK – Default Probability, 2.79%
(4) IONE – Default Probability, 2.17%
(5) MAYWOOD - Default Probability, 1.46%
(6) ATWATER – Default Probability, 1.22%
(7) HURON - Default Probability, 1.08%
(8) CHICO - Default Probability, 0.88%
(9) CALIPATRIA - Default Probability, 0.84%
(10) RIDGECREST - Default Probability, 0.76%
(11) SAN FERNANDO - Default Probability, 0.75%
(12) BLYTHE - Default Probability, 0.74%
(13) FIREBAUGH - Default Probability, 0.74%
You can read more about why each city is on the list at CPC’s Web site.