Not certain. Many if not most munies are supported by third party insurance, such as Lloyds of London in case of default. And all are supported by the power to tax. COVID is a temporary disruption that will hopefully soon pass. We'll see...
And AIG insured many mortgages. Remember 2008? Insurance is good for small-scale disasters, not large-scale ones like 2008 Mortgage bubble or COVID19.
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For most city level governments, things like Theater, Restaurants, Sport-events, Conferences, Gambling, Malls, Tourism, Hotels, Gasoline Tax (aka Driving), serve as a major leg of their tax revenue.
All of which has been severely restrained by current events.
Are you talking about the recent $1.9T stimulus package? Because there are strings attached to it. Republicans are angry because they aren't allowed to use the money to finance tax cuts. Democrats are angry because they aren't allowed to use the money to pay pension contributions.
Fair enough — I’d wager large city bankruptcies remain quite possible under the next GOP Administration. The most liberal Republican POTUS of my own lifetime said “No” to NYC:
McConnell is on the record saying he doesn't think the government should be bailing out blue states for what he has deemed profligate spending, so no need to look back to 1975.
> “I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated. You raised yourself the important issue of what states have done, many of them have done to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations.”
Are they?
COVID19 has destroyed the tax-budgets of many states and cities. Deficit spending / stimulus is the current plan, but how long can States keep it up?
I know there's been a stimulus bill just passed. But is it enough to get state budgets back in order after a tough year?