Vallejo Votes For Bankruptcy - Politics News Story - KNTV | San Francisco: "After nearly five hours, the Vallejo City Council voted unanimously late Tuesday night to file Chapter 9 bankruptcy protection. The city faces a $16 million deficit in the 2008-2009 budget starting July 1 and unsuccessfully negotiated with its police, firefighter and electrical workers unions for contract concessions through 2012. Public safety salaries comprise 74 percent of the city's general fund budget...Vallejo joins a small number of municipalities that have declared bankruptcy should officials decide it's their only option. Orange County declared bankruptcy in the 1990s after then-Treasurer Robert L. Citron borrowed hundreds of millions of dollars while speculating in high-risk securities investments that depended on low interest rates. The county lost $1.64 billion. Desert Hot Springs also filed for bankruptcy in 2001."
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Local governments are under considerable pressure these days. Nobody wants to pay taxes, the federal government is dumping responsibilities (unfunded mandates) on them, people move around like crazy, and the housing finance meltdown is still making big ripples.
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