Self-interest pushed San Bernardino into bankruptcy

[Locutus]

SAN BERNARDINO, Calif. – When this sun-drenched exurb east of Los Angeles filed for bankruptcy protection in August, the city attorney suggested fraudulent accounting was the root of the problem.

The mayor blamed a dysfunctional city council and greedy police and fire unions. The unions blamed the mayor. Even now, there is little agreement on how the city got into this crisis or how it can extricate itself.

San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.

Little by little, over many years, the salaries and retirement benefits of San Bernardino’s city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.

Unions poured money into city council elections, and the city council poured money into union pay and pensions. The California Public Employees’ Retirement System (Calpers), which manages pension plans for San Bernardino and many other cities, encouraged ever-sweeter benefits. Investment bankers sold clever bond deals to pay for them. Meanwhile, state law made it impossible to raise local property taxes and difficult to boost any other kind.

more


San Bernardino bankruptcy: How self-interest sank California city | Economy | News | Financial Post

 

[captain morgan]

Stockton was in a similar position not so long ago

 

[damngrumpy]

Sounds to me like a cooperative effort here, the city is responsible for investing the taxes to
pay for projects and the future of benefits. Yes there would be union involvement in elections
that is natural you want your views to be the ones that win the day. Undoubtedly the Chamber
of Commerce contributed to the election process as well. I heard that the Mayor is to blame,
the fire and police were greedy and the unions were to blame. Well it sounds to me that they
were all to blame and voters as well either by not listening or showing up to vote.
A very small line in this also mentions investment bankers, Hmm not many investment bankers
are union.
Did the unions contribute very likely yes but they wouldn't be the only ones.

 

[Locutus]

San Bernardino: Poster Child for Blue Model Decline

Even among California cities that have declared bankruptcy, San Bernardino stands out as extraordinary in its own right: Its city officials had been lying about the city’s fiscal condition for nearly 20 years.

A new Reuters piece explains how the city continued to raise wages and benefits for public employees long after it became clear that these moves were putting it on the road to a budget meltdown and making it the poster child for blue model decline:


more



http://blogs.the-american-interest....rnardino-poster-child-for-blue-model-decline/