Even though school districts cannot declare bankruptcy, these 2 districts are exploring it:

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District officials have said declaring bankruptcy would, among other things, allow them to throw out union contracts and pay lower salaries.

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could result in the state's replacing board trustees with others who would be required to balance district budgets - presumably, either through tax increases or service cuts.

This may get very interesting...

http://www.newsday.com/long-island/2-li-....