I am adding a link to this article that updates Toledo’s fiscal situation. (See prior post.) The city is wrestling with a budget gap and trying to negotiate with unions over compensation. Ohio is a state that has a fiscal emergency program and municipalities may not file for bankruptcy without going through the state. The state’s oversight of fiscal emergencies is useful but does not give the oversight panel the right to cancel contracts or replace management. The biggest clout is the panel’s ability to prevent borrowing — a severe but important hammer for any city in fiscal emergency that may be facing a cash flow shortfall.