Posted on 04/21/2008 7:46:12 AM PDT by SmithL
Vallejo will inch closer to financial ruin Tuesday when the City Council lets pass its do-or-die date to avert bankruptcy.
City staff members have been unable to come up with a detailed, long-term financial plan because negotiations with the police and fire unions are still ongoing. The city is asking for steep concessions from the unions, whose members are among the highest paid in the Bay Area and whose salaries comprise about 74 percent of the city's budget.
"We had hoped to have an agreement by April 22 to give to the council," said Mayor Osby Davis, who has sat in on the negotiations. "But I'm optimistic. There's always room for a resolution if people are willing to give and take."
Vallejo has been slammed by the crumbling housing market and its escalating public safety salaries. In March, faced with a $9 million deficit and no reserves, the city slashed funding to senior centers, the arts, museums, libraries and public works, and laid off 16 city workers. Police and firefighters took a 6.5 percent pay cut, and the city closed two fire stations.
The cuts are intended to keep Vallejo afloat through June 30. But the city needed to come up with a long-term solution to its financial woes by April 22, allowing it the minimum amount of time to declare bankruptcy if necessary. The city heads into the 2008-09 fiscal year with a projected deficit of $13 million.
If it declares Chapter 9 federal bankruptcy, it will be the biggest city in California to go that route, and the only one to do so because of long-term financial problems. Desert Hot Springs (Riverside County) declared bankruptcy in 2001 after it lost a lawsuit from a developer. Orange County declared bankruptcy in 1994 because of bad investments.
(Excerpt) Read more at sfgate.com ...
Too many ticks will eventually kill the dog.
CA is also getting in bad shape. The deficit is growing and all the signs of further reduction in revenue are there.
Declining house prices, declining retail sales, declining gas sales, etc. It will be interesting to see what the deficit finally is.
We have several friends who have become part time Californians to avoid state taxes..become residents in states with no state income tax or do not tax retirement income. The burden of the illegals and the welfare state has just gotten too big.
Yes, and those “ticks” that are killing this dog are the illegal aliens whose use of city services, WIC (food stamps) and free medical care—as they send the illegally-earned money back to Mexico instead of spending it in the community. The Bay Area—while it’s number of illegals is vastly lower than the Invaded L.A. County to the South—still holds millions of illegals from Mexico, China, Vietnam, Pakistan and Afghanistan and many other countries. Vallejo is but one card in the deck that is falling. Other local cities will follow. These citie only hope? Something they refuse to consider—calling on ICE to rid their community of illegal aliens. Until these freeloaders are gone, local communities will suffer.
Two party rule is bad enough. What is needed are laws to somehow incubate 4 or more political parties to break up the socialist monopoly.
Loosing MINSY didn’t help their economy either. That had to be a major hit.
wow, what guts.
Well, you can't really do that with a law because that would require legislating into existence four different points of view on government spending and management. And even at the Federal level we only have one. ;)
Vallejo is in the tank because of civil service unions, including police & fire. Calif's various state/county/district governmental entities have thousands of very highly paid individuals, along with hundreds of thousands of well paid people, all collecting generous salaries, benefits & PENSIONS.
Of course, none of this can stand - it will eventually (sooner than later) collapse. The people who thought government employment was the way to gain riches are in for an unpleasant surprise.
As Calif lurches forward as a 3rd world state, it will further reflect a true 3rd world environment: the rich at the top, with a huge pool of impoverished masses, along with very poor social/gov't services manned by individuals who will have to supplement their meager earnings via graft.
More parties won’t help the state of california is operated like chicago only more crooks.
My sister is trying to sell her house in Castro Valley. Last year, it was appraised at 800K. A realtor told her last week she'll be lucky to get 650K. I'm sure she's still paying property taxes on the 800K.
As I see it, the bubble in California has popped. Your average productive citizen stuck it out in California, knowing their house would continue to appreciate at 10% or more annually. Take that away, and all you have left is the decent weather.
I've been told by many that my 2500sf house in Valley Ranch would be worth about 700K in California. Houses in our neck of the woods are going for $100-$120 per sf.
Add to this the growing and unfunded retirement pension and health care package and the writing is on the wall for most major cities in the state as well as the state itself. I’m surprised the state is able to sell any bonds at all.
The 900-pound gorilla in the closet is still not mentioned: That our idiot legislators continue spending like drunken sailors, oblivious to that side of the equation.
And the education lobby continues doing their thing, insisting that they have the final word, and that class size is sacrosanct, and that their bosses, the taxpayer, better just shut up and continue paying....
... totally ignorant of the fact that the majority of us taxpayers were educated quite nicely, thankyouverymuch in class sizes typically of 40 students...
Yeah. Like that "for the children" gambit is gonna fly.
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