Bankrupt Cities

Bankrupt San Bernardino Attempts to Address Inability to Actually Negotiate Public Safety Wages


They can't even afford having a first floor.
Credit: Amerique, Wikimedia Commons

San Bernardino, California, announced it was bankrupt in 2012, and in 2013 a judge agreed. San Bernardino suffers many of the same problems ailing municipalities across the country face—huge pension obligations that are either unsustainable or that the city simply ignored in favor of cronyist economic development projects (or oftentimes both).

San Bernardino, though, also has additional twist that is hamstringing any effort to actually balance its budget: The city has no real control over the wages for its public safety employees. The city's charter requires that the city set its wages for its police and fire employees based on the average wages for public safety employees in nearby cities of similar sizes. The big problem here is that San Bernardino is the poorest of these cities. It's considered one of the poorest metropolitan areas in the country, next to Detroit. As a result, public safety employee wages, usually the biggest expense in any city's budget, were completely out of their hands. Even during bankruptcy proceedings, the city council was handing out raises to the police, blaming the city charter's rule.

Following recent elections, which have resulted in almost a complete turnover in city leadership, the new city council voted unanimously this week to put several changes to the city's charter on the ballot for public vote. Among the changes will be the removal of this charter rule, known as Section 186. Instead, the city will set wages through collective bargaining, the way many other cities do. This obviously doesn't necessarily make everything better. Many cities have been more than willing to capitulate to unreasonable employee union demands anyway. But it at least puts the city in a position to actually say no. Ryan Hagen, covering city government for The Sun in San Bernardino, reported that the president of the local police union is looking for ways to kill the effort to replace the rule.

I wrote about the particulars of San Bernardino's troubles in the November 2013 issue of Reason. Last week, Kennedy and Reason contributor Steven Greenhut looked at the city's woes during an episode of The Independents. Enjoy below: