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San Bernardino bankruptcy: Other California cities could be next
July 12, 2012

San Bernardino this week became the third California city to seek bankruptcy protection in the last month, and experts say it might not be the last.

"There are likely to be more in the future, but it's hard to know, since a lot of struggling cities may manage to work things out,'' said Michael Coleman, a fiscal policy adviser for the California League of Cities. "Some cities may not go into a bankruptcy, but they may dissolve. They may cease to exist.''

Once rare, turning to bankruptcy has become a painful but enticing option for cities whose labor costs and municipal debt far outpace anemic tax revenue. The Bay Area city of Vallejo began the current trend in May 2008, filing for Chapter 9 bankruptcy protection because, city leaders said, salaries and benefits for its public safety workers were eating up too much of the general fund. Source: http://latimesblogs.latimes.com/lano...s-be-next.html

“We’ve hit basically a perfect storm, what with the economic recession, with the meltdown of our nation’s economy, the massive loss of both sales and property tax which is essentially the foundation stones for city services,” said Morris.
Source: http://losangeles.cbslocal.com/2012/...no-bankruptcy/