Posted on 11/21/2008 11:38:09 AM PST by SmithL
When the city of Vallejo filed for bankruptcy protection in May, the logical question was: Is this a sign of things to come?
Now two more California cities – Rio Vista and Isleton – are considering bankruptcy protection as an option as they face large budget shortfalls and staggering debt.
While experts caution against ringing the alarm bells just yet, they do say tough economic times could push municipalities already on the brink over the edge.
"I think it's quite possible municipal bankruptcies could become somewhat more common but will still be very rare," said Jason Dickerson, budget and policy analyst at the state's Legislative Analyst's Office. "There are more municipalities that will look at what it means."
Cities, counties and other governing bodies across the state are reeling as budget projections many considered to be conservative at the start of the fiscal year, July 1, are proving to be wildly optimistic as the housing slump is affecting property tax revenue and sales tax receipts are well below last year.
Many municipalities not only are looking ahead to cuts next year but also are actively trimming expenditures to fix shortfalls in the current fiscal year's budget.
"California cities are like the rest of the country and rest of the state, really struggling right now," said Eva Spiegel, spokeswoman for the League of California Cities.
Rio Vista is facing an $816,000 deficit in its general fund budget for the current fiscal year and a $1.6 million deficit in its sewer fund, said Hector De La Rosa, the city manager. While officials and the City Council are looking at other cuts and ways to save money – hiring freezes, work furloughs and increased fees, among others – bankruptcy protection is an option.
"There are some benefits to Chapter 9 bankruptcy,"...
(Excerpt) Read more at sacbee.com ...
Why not, the spend money like the federal government?
Odd - my city in VA (pop 11,000) has north of $300M in the bank.
I love Virginia, yessiree. Your city hiring? :)
These cities are doing the right thing by declaring bankruptcy. It is the only way that they can jettison unneeded expenses and live within the taxpayers’ means.
LOL, no clue.
Vallejo — my former hometown — lived there from ‘65 to ‘72. The cops went on strike in ‘69 while the Zodiac was on his tear through the area. The city acquiesced and gave them essentially what they wanted, and the pay and benefit packages just built up from there.
Another case of fat unions bringing down everyone around them. Nicely done.
Why don’t they just raise taxes? oh, sorry...I guess they can only do that 5 times per year!!! Idiots, maybe if you FIRE all the “fat hogs” living off the tax payers there would be NO DEBT and something would actually get done!!
Unions have driven Detroit to its knees, why shouldn’t they drive government to the same position?
Illegals don’t cost us anything.
Bankruptcy is the only way to deal with the public employee unions, I'm afraid.
The single biggest mistake in the past 50 years in the US was allowing public employees to unionize.
It’s unions in cahoots with politicians.
The same all over. If your senator, councilmen, mayor etc. want to be reelected they need to agree on union wage, benefit, staffing levels.
It’s a you to me, I to you, damned be the taxpayer.
There is no way out but bankruptcy proceedings where salary, wage, pension, staffing levels, or farming out of functions to the private sector are established and decided upon to recreate a sound fiscal basis.
The public sector is already above wage, benefit, job security scales versus the private sector.
Taxpayers are maxed out.
Even New York City has a history of healing through bankruptcy.
So raise taxes ya fools.
Keep spending for social b.s., of course. But keep taxing those poor working turkeys more and more to pay for crap?
Time for a revolution yet????????
No problem. All that’s needed is a bailout. I’m sure there must be healthy cities somewhere in the U.S. that we can tap. No city should be enjoying any surpluses as long as some are suffering. /s
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