On August 29, 2012, the city of San Bernardino, California is looking for a way to cut spending while filing bankruptcy. According to the new budget created because of the bankruptcy filing, the city is planning to cut overall costs by 30%. In the plan, no department is safe, all of them will be on the chopping block. The city employee unions are already ramping up to fight the bankruptcy filing cuts.
After filing bankruptcy this last month, San Bernardino officials had to come up with a plan to try and mitigate their overall costs. The mayor and city Council released a 71 page plan in a closed session and then opened it to the public on Wednesday evening. In the released document was the elimination of 100 full-time jobs that spanned from the mayor’s office, the police department, fire department and every other department. All jobs that are currently vacant will no longer be filled in many of the part time jobs will be completely eliminated. It has been discussed whether or not to close the community and senior centers also.
As many California cities are considering filing bankruptcy, San Bernardino was the third to fall victim this year behind Stockton and Mammoth Lakes. When the city filed for Chapter 9 bankruptcy on August 1, it was reported to have a budget shortfall of $46 million. Because of this, the financially bankrupt city was wondering if it would even be able to pay its employees and provide essential public services. With the new cuts, San Bernardino believes they can save $22 million a year. The only problem is, this does not come close to the $46 million gap they are trying to close.
As many other cities are expected to file for bankruptcy this year, the only true beneficiaries will be the bankruptcy attorneys. Recently, there was an article that showed . Many other cities have been caught with their pants down because of the huge unfunded liability created by the public employee pensions. The downturn in the market back in 2008 was only the beginning of the problem. Now that the snowball has been pushed off the hill one city after another will be probably filing for bankruptcy.