San Bernardino Invokes the B-word: Bankruptcy


Let's remember the days when burgers cost 15 cents and public employee contracts weren't destroying us all.

The City of San Bernardino (population: 210,000), birthplace of fast food, may be the next California city to file for bankruptcy if it can't find a way to deal with its budget deficit. Via The Press Enterprise (Riverside):

A June 26 budget report to the council stated that city spending for the current fiscal year is projected to exceed revenues by more than $45 million if it is unable to find other revenues and/or cut spending.

The report states that city has seen its annual general fund revenues drop by $11.69 million in the past five years due to declines in sales, property and utility taxes while its reserve funds have been depleted. …

Among the measures being proposed are restructuring the police and fire departments to reduce "non-essential services" and closing one or more inefficient fire stations. Other proposals include asking city employees to pay more of their retirement costs, reducing salary increases and offering an early retirement program.

According to reporting by The Sun (San Bernardino), personnel costs make up 75 percent of the city's budget and the money being spent on retirement has risen to 13 percent of the general fund.

San Bernardino's City Council will meet tonight and possibly again tomorrow to try to hammer out a solution. If the city does file for bankruptcy, it will be the third California city to do so in the past 30 days. Both Stockton and Mammoth Lakes have recently filed for bankruptcy. (Harris Kenny, policy analyst for the Reason Foundation, provides more detail about Stockton's and Mammoth Lakes' situations in their policy blog).

More from Reason on bankrupt cities.