Shrugging...

Disincorporation - dig it. 

Most talk of disincorporation appears to be exploratory, and some public-finance experts say towns may not have that option if it is being used to unload financial obligations. "This is somewhat of a legal gray area, because disincorporation was not designed to allow cities to escape financial hardship," said John Knox, a public-finance consultant with the San Francisco office of law firm Orrick, Herrington & Sutcliffe.

Mr. Knox, a bankruptcy consultant to Vallejo, said shifting oversight of a city's services to a county or state during the current economic environment would be a tall order. In California and many other states, the county or state must approve such a move, he said. Most counties are ailing as badly as cities, and are unlikely to readily approve a disincorporation, he said.

That isn't stopping some towns from checking into the possibility. In Mountain View, a Denver suburb with about 500 residents, sales-tax revenue has shriveled with the departure of four businesses last year, undermining its ability to pay city-government employees or to afford police and sewage service.