Franklin, Indiana, an industrial-based town south of Indianapolis, is starting to feel the effects of Wall Street’s pain, said Fred Paris, the town’s mayor on CNBC’s “Squawk on the Street.”
Automotive-related businesses are seeing fewer orders and the insurance company that insures the city’s bonds has been downgraded.
“We just got notice that the insurance company that insures those bonds' rating has been lowered, which also affects our ability as a city to borrow money,” he said.
Although Franklin’s tax base remains solid and the employment outlook looks optimistic with a new Cooper Tire facility moving in, the city is “crossing our fingers that we don’t lose those new jobs,” he said.
The town is concerned about whether the $700 billion government bailout will cut into capital expenditures on infrastructure.
“We’re just getting ready to do—to take on about a $5 million road project, which isn’t a lot of money to some people, but it is to a small town like ours, and suddenly we find ourselves wondering, you know, with $700 billion going for this, will there be money for the small projects and small communities across the country,” Paris said.
Former New York City Mayor Ed Koch discusses the '77 economic crisis in New York City.