Several weeks ago I noted in this space that the crisis in public finance facing California cities had grown so severe that projections showed more than 20 percent of the Golden State's local governments facing the prospect of bankruptcy. In recent weeks, Mammoth Lakes and Stockton have succumbed, with the latter being the largest city to go under in American history. Now, less than two weeks later, another California city will be taking the silver medal.
Facing a $46 million deficit and a cash shortfall so severe that the city can't cover payroll, San Bernardino, located in Southern California's Inland Empire, began the process yesterday with a vote of the city council. Many of the issues at work in this city of more than 200,000 are (sadly) standard fare for the state's dysfunctional local governments: soaring pension costs, excessive debt, and reckless spending. But the plot thickens from there. As Phil Willon reports in the Los Angeles Times:
"The city has reached a breaking point and faces the reality of deficient cash on hand to meet its contractual and debt obligations,"[a budget analysis prepared for the San Bernardino City Council] said.
City Atty. James Penman said city budget officials had falsified documents presented to the mayor and council for 13 of the last 16 years, masking the city's deficit spending.This may well turn out to be the perfect storm of bad government in California. We already know there was Stockton-style structural dysfunction in San Bernardino. But the sudden allegations of falsified budgeting open up the prospect that there was systemic corruption as well. As we recently saw in the Southern California city of Bell, the depths to which local officials will sink when they think no one is watching can be truly astonishing. Let's hope that's not the case in San Bernardino. But let's also keep our eyes open.
"For the last 16 years the budget prepared for the council showed the city was in the black," Penman said, not naming those allegedly responsible. "The mayor and the council were not given accurate documents."
[San Bernardino Mayor Patrick] Morris was taken aback by the comments, saying this was the first time he has heard of the allegations.