San Bernardino Mayor Pat Morris ponders a question Wednesday, July 11, 2012, regarding the Tuesday city council vote authorizing a bankruptcy filing outside San Bernardino City Hall in San Bernardino, Calif. City officials have said San Bernardino “has an immediate cash flow issue” and may not be able to make payroll with a budget shortfall of more than $45 million in the next fiscal year. (AP Photo/The San Bernardino Sun, Rick Sforza) Photo: Rick Sforza, Associated Press / SF
The bankruptcies of San Bernardino, Stockton and Mammoth Lakes are raising questions about whether other California cities are confronting the same fate. Stockton’s filing had been discussed for months, but San Bernardino’s caught the public by surprise. The question is, how many other communities face insolvency?
From the Chronicle’s Wyatt Buchanan: “An additional eight California cities, including Fairfield, which declared a fiscal emergency in April, have officially notified the municipal bond market this year that they are facing significant financial hardship, according to Matt Fabian, managing director ofMunicipal Market Advisors, which conducts independent research on the municipal bond industry.”
“The notifications don’t necessarily mean these cities are headed for bankruptcy court, but they do signal real adversity.”
“Along with Fairfield, the other cities include Arvin (Kern County), El Monte (Los Angeles County), Grover Beach (San Luis Obispo County), Lancaster (Los Angeles County), Monrovia (Los Angeles County), Riverbank (Stanislaus County) and Tehachapi (Kern County).”
Read all of the piece and here is another story:
Don’t be surprised if more California cities go belly up.
Certainly a number of experts around the state won’t be. The pressures that pounded San Bernardino, Stockton and Mammoth Lakes into bankruptcy mode aren’t much different from those threatening other cities around the state: stagnating tax revenue, spiraling pension obligations and decreased financial support from the state, among others.
“It seems inevitable that there will be more bankruptcies,” said economist Ed Leamer, director of the UCLA Anderson Forecast, which studies the regional and national economies.
“Our leaders have made budget commitments premised on optimistic and unrealistic expectations about future revenue growth and future gains in the stock market that aren’t materializing and are not likely to materialize.”
Predicting which cities are next to fall, however, is difficult, he said.
San Bernardino’s looming bankruptcy, for example, was preceded by little warning, though the city was known as one of the epicenters of the housing foreclosure crisis.
Dwight Stenbakken, deputy executive director of the League of California Cities, agrees other cities might be just as vulnerable, but it’s hard to know for sure.
“We don’t know of any cities that are at this point seriously considering bankruptcy,” he said. “Usually cities, if they’re in financial trouble, they’re reluctant to let anybody know until they finally make the decision.”
“We might have a few other bankruptcies,” he said.
The California Democratic Party and their friends, the Public Employee Unions have had a lock grip on the California Legislature for decades. They have simply over-regulated business and overspent the entire state of California into insolvency.
Maybe California voters will, instead of moving to Texas and Colorado, decide to fight and vote those left-wing ideologues out of office?
Any Californians up for another California taxpayer/voter revolt?
The top two California election system might just very well allow independent Californians to retake their government.
We will see – with more city bankruptcies likely on the horizon.