San Bernardino Bankruptcy: The End of Innocence?

The great recession landed the second of a one-two punch as San Bernardino this week followed closely on the heels of Stockton, California in voting to file for Chapter 9 bankruptcy. San Bernardino is reporting a $45,000,000.00 budget deficit and is “so broke it can’t cover its payroll.”  San Bernardino will follow Mammoth Lakes, a  California mountain resort of 8,200, who filed for Chapter 9 protection on July 3 saying it can’t pay $43,000,000.00 owed on a legal judgment.

Like any struggling business or family, municipalities need to tighten their belts when faced with sharp declines of income. As the baby boomers continue to age, pension contribution obligations and retiree healthcare costs are beginning to spiral out of control.  We may well be heading into an age where the security of a lifetime pension following a career in municipal service no longer exists.  If cities, counties and states can no longer entice workers with this kind of financial security and the private sector becomes saturated with job applicants who have nowhere else to turn, we may all start to think of pensions, subsidized public transportation, and even reliable emergency services like police and firefighting as fond memories.  The 20th Century may begin to take on the hazy glow of a golden age of innocence, as all of us begin to adjust to a very different role that government will play in our lives.

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