The L.A. Times reports: ???San Bernardino on Tuesday became the third California city to seek bankruptcy protection in the last month and, while no one expects the state to be consumed by municipal insolvencies, other cities teeter on the abyss.???
Really? ???No one expects the state to be consumed by municipal insolvencies???? Granted, I expect Illinois to be consumed first, but it doesn???t seem like an entirely unlikely fate for the Golden State as well.
One other person who might just expect California to be consumed by municipal insolvencies is Los Angeles County Supervisor Mike Antonovich, who told Breitbart News he wants L.A.???s fiscal health compared to San Bernardino and the previous dead-parrot city, Stockton. He called these bankruptcies ???an ominous warning for other municipalities that fiscally responsible policies must be the top priority in budgetary planning.??? If Los Angeles turns out to be in any sort of comparable straits, California???s wave of bankruptcies will go nuclear.
???Rather than matching spending to revenue,??? Antonovich warned, these troubled city governments ???float bonds in order to cover escalating costs for retiree health care, pensions and public facilities and capital improvements. This is a recipe for fiscal collapse.???
Ben Shapiro of Breitbart News observes this is ???the same recipe the entire State of California seems to be using.??? I would add it???s not much different from the recipe adopted by much of the Western world, most definitely including the federal government of the United States. Italy is a textbook example of wild spending commitments made when bonds were easily floated for titanic amounts of money??? followed by chaos and panic when it suddenly became harder to borrow more.
Those commitments are not easily broken. The L.A. Times reports that San Bernardino ???may have to dissolve its Fire Department or portions of the Police Department, an unavoidable reality when public safety accounts for nearly 75% of the general fund budget. The city would then contract with county and state agencies for those services.??? Financial obligations to the employee retirement system have nearly doubled over the past five years.
The city firefighters union doesn???t sound like it???s in the mood for any more ???concessions,??? as their spokesman ???blamed the financial crisis on the mayor and former city manager spending money on such pet projects as a new downtown movie theater.???
Bankruptcy came with astonishing speed, as the city suddenly found itself almost $46 million in the red, with only $150,000 in the bank. The city attorney makes the astounding charge that false budget numbers were submitted to the city council for the past sixteen years. The city manager says it???s not that bad ??? the budgets were only ???erroneously said to be balanced for the last two years.??? Many lawsuits could be launched to get to the bottom of the situation. This will, of course, cost the already bankrupt city millions of dollars in legal fees.
San Bernardino desperately invoked an emergency clause in California???s recently enacted laws so it could escape the mandatory mediation that was supposed to avoid municipal bankruptcy filings. Too bad the citizens of this basket-case state can???t invoke an emergency clause to escape from public employee unions and big-spending government officials. Perhaps they can take comfort from knowing everything that’s killing them now was hailed as a wonderful triumph of “collective bargaining” and government “investment” just a few years ago, and anyone who tried to stop it would have been treated like Wisconsin Governor Scott Walker.