Trickle of Cuts Led to Vallejo Declaring Bankruptcy

[courtesy of California Progress Report]

Tip of the Iceberg in California’s Local Governments Trying to Maintain Public Safety Spending With Federal, State, and Local Cuts

By Robert Cruickshank

After months of wrangling and negotiating the city of Vallejo has voted to declare bankruptcy. And to hear the local media tell it, like the San Francisco Chronicle, it is the fault of public workers, not poor political leadership:

“After about four hours of discussion and public comment from the standing-room-only crowd, the council voted 7-0 to approve Tanner's recommendation to declare Chapter 9 bankruptcy protection as a means to reorganize its finances, which have been shattered by spiraling public employee salaries and the plummeting housing market....

“The city and its public safety unions have been at the bargaining table for about two years. The city is asking for its police and firefighters to take salary, benefit and staff cuts, while the unions say any further cuts would endanger public safety as well as the safety of the police and firefighters.

“Vallejo spends 74 percent of its $80 million general fund budget on public safety salaries, significantly higher than the state average. The generous contracts are the result of deals struck in the 1970s, following a police strike that left the city in turmoil.”

What is not said here, or anywhere in the article, is the reason for that public safety spending. Vallejo's police and fire services are understaffed - as are many agencies in California, in a little-known but extremely important and widespread phenomenon. City leaders have been loath to hire new workers, but they have also needed the public safety services - so the workers that are on the payroll have been working overtime. And overtime pay is usually always higher than regular pay.

Vallejo, like many California cities, wanted to maintain a high services and low tax environment, and has found this is not possible, especially when an artificially-created bubble bursts. Instead of accepting responsibility and seeking new revenues to balance the city's books without endangering the public, city leaders chose to blame the public workers for the problems and declare bankruptcy instead of avoiding the underlying issues.