City of Miami Going Broke, Implications in Mayor's Race and Diaz's Future

The City of Miami is bleeding money, causing the Herald to label the situation the "worst financial crunch" since 1996, when the city flirted with bankruptcy and had to have its hand held by the county and state. 

City hall has depleted its reserves by about $50 million, thanks in part to a 400 percent rise in pension obligations since 2001; not budgeting enough money to cover raises, overtime, and retroactive pay it agreed to in union contracts; and the fire-fee settlement. 

The two main mayoral candidates -- Commissioners Joe Sanchez and Tomás Regalado -- are unsurprisingly jumping on the issues. Sanchez has scheduled two emergency budget hearings next month, while Regalado, the only current commissioner serving in 1996, gave plenty of quotes claiming the situation was eerily similar to that crisis. This will undoubtedly be a main issue in the race -- let's just hope it doesn't devolve into a contest over who can create the biggest sound and fury over it. 

The news could also dampen the buzz around the possibility of Mayor Manny Diaz running for Florida's CFO. Diaz hasn't given any substantive public comment about his interest, or lack thereof, in the race, but political blogs and journalists have hinted at the possibility, given Diaz's success in turning around the city's financial woes when he was first elected. However, the Herald says, "Diaz recognizes he has failed to fix a pension problem that, if unchanged, will vex taxpayers for decades." Which could be damning if he mounts a campaign for Florida's top budget watchdog. 

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