U.S. Towns Facing Disincorporation

Small towns like Mesa, WA and larger ones like Vallejo, CA may be forced to dissolve in light of their worsening finances. Local counties will need to absorb residents.

"Incorporation brings residents a local government with the ability to raise money through taxes and bond issuances. It also gives them more control of zoning decisions and development, and usually provides for local services such as trash pickup and police as well.

Dissolving a town government, on the other hand, often shifts responsibility for providing services to the county or state. A city's unexpired contracts usually remain binding, and residents are still obligated to pay off any debt.

But long-term commitments such as pension liabilities and day-to-day services such as sewage and water can be folded into services run by the county, public-policy experts say.

Disincorporations are rare, usually resulting from population declines that leave too few residents to support the government."

Full Story: Towns Rethink Self-Reliance as Finances Worsen

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