THE BURNED OVER DISTRICT

Cities and other local government entities were able to move the expense of needed projects of their books by setting up special agencies that could issue bonds to pay for them. The bonds would be paid by receipts with a guarantee from the government that no one expected to be invoked. Well, now with the Republicans moving heaven and earth to keep the economy in a state of depression, the poop has hit the propeller.

In a number of communities, especially in New Jersey, Michigan and Washington State, local officials have recently scrambled to work out fiscal emergencies caused by guarantees and similar promises. Hoboken dodged a bullet last year, for instance, when a buyer was found for a bankrupt hospital whose debt the city had guaranteed. Buena Vista, Va., narrowly missed a creditor foreclosure of its city hall and police building, after a park authority failed to repay the bonds for a golf course.

In other places, bond guarantees have been time bombs, causing problems too severe to be solved in a workout. Stockton may be headed for Chapter 9 bankruptcy this week after pledging taxpayer money to backstop authorities’ debts for a hockey arena and other showcase buildings. Scranton, a faded former coal center, touched off a full-blown debt crisis this month, losing access to the capital markets when its City Council refused to honor a taxpayer guarantee for a parking authority’s bonds.

Residents of Pennsylvania’s capital, Harrisburg, recently learned from a forensic audit that their city’s fiscal woes could be traced to a guarantee issued in 1998, for the bonds of a trash incinerator project. Every few years after that, the authority running the project issued more bonds, and the city guaranteed those as well.

The audit showed that the authority had been selling new bonds for the cash to pay its older bonds — saving unwitting residents from having to honor their guarantees for a time, but blowing up their debt from the incinerator to an impossible $310 million. That’s more than three times what residents owe on the city’s own bonds.

Harrisburg tried unsuccessfully to declare bankruptcy last year but was blocked by the state. It is widely expected to try again.