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Miami’s Fiscal Crisis (1996-2001): Lessons For Practice In American Cities  


Author:  Howard A. Frank.; Milan J. Dluhy.


Source: Volume 23, Number 04, Winter 2003 , pp.17-44(28)




Municipal Finance Journal

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Abstract: 

In the fall of 1996, the city of Miami, one of the poorest cities in the U.S., came to the brink of financial ruin. At that time, a $68 million shortfall was identified (about 20 percent of the budget), and the city manager, a city commissioner, and a local lobbyist resigned and were accused and later convicted of bribery and fraud. The State of Florida appointed a State Oversight Board for the city within three months of the initial financial crisis to oversee the city’s day-to-day finances. For the next five years (1996-2001), the city struggled to regain its financial footing. On December 21, 2001, Florida Governor Jeb Bush officially ended Miami’s five-year State of Financial Emergency and dissolved the state-appointed Oversight Board that managed the city’s finances. The $68 million projected for the city’s fiscal year 1996 budget has been replaced by an anticipated general fund reserve of nearly $60 million for FY 2002.Miami’s crisis appeared to be a hybrid that has some characteristics of its Rust Belt predecessors, such as New York or Cleveland, but also demonstrated an etiology that was similar to Orange County’s recent bankruptcy. This article reviews the city’s problems and recovery and provides lessons for public officials, policy makers, and analysts.

Keywords: 

Affiliations:  1: Florida International University; 2: University of North Carolina at Wilmington.

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