Town of US$1m homes declares fiscal emergency

San Francisco

THE San Francisco suburb of Moraga seems as far as one could get from the financial pressures that have battered big cities like Detroit or Chicago.

The price of a typical home has soared to more than US$1.2 million, it's not drowning in debt and there are even free summer concerts.

But on June 28, the 17,000-resident town authorised a declaration of fiscal emergency, a step California cities can take before bankruptcy.

In this case, it gives officials in the affluent enclave the power to expedite a referendum on new fees to boost its revenue, which has been restrained by a lacklustre retail base and property-tax limits the state enacted almost 40 years ago.

"We just don't have enough revenue to take us through the future for many more years before we would really be in some of the situations other cities are, where they're laying off mass numbers of employees or declaring bankruptcy," town manager Robert Prie…