EagleTribune.com, North Andover, MA

Merrimack Valley

February 14, 2010

Lawrence fiscal crisis prompts talk of bankruptcy, receivership

Lawrence fiscal crisis prompts talk of bankruptcy, receivership

LAWRENCE — Bankruptcy. Receivership. Finance control board. Financial overseer.

For the last several months, city and state officials have batted around these and other terms they believe represent the solution to the city's $24.5 million budget deficit.

"If Lawrence can't pay their bills, maybe they should file for bankruptcy and start over," State Treasurer Tim Cahill, an Independent candidate for governor, said last month.

Republican state Rep. Karyn Polito, a possible candidate for attorney general, suggested the city should be placed into receivership.

One vocal critic of Lawrence, fired city planner Mike Sweeney, as well as a growing number of members of the state Legislature, think the state should implement a finance control board.

A fourth option, contained in a bill currently before the Legislature's House Ways and Means Committee, would allow the city to borrow up to $35 million to balance its budget this year while also providing for a financial overseer to come into City Hall to advise Mayor William Lantigua's administration. If progress is not made in solving the city's budget crisis by next year, the state's Secretary of Administration and Finance would then appoint a finance control board.

Whatever option is ultimately chosen, one thing is clear — getting the city back on solid, financial footing is going to be a long and painful process.

The Springfield model

In 2004, the city of Springfield was in a similar predicament to the one Lawrence now finds itself in.

Tom Walsh, communications director for Springfield Mayor Domenic Sarno, said the city had been having financial problems for years, and there was talk that the city could either go into receivership or be put under the oversight of a finance control board.

Gov. Mitt Romney convinced Springfield leaders to accept a five-person finance control board, which had sweeping powers to move in and change the way the city was governed.

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