Another casualty of the recession…
From The Los Angeles Times:
Maywood, a small working-class community south of downtown Los Angeles, plans to lay off all its employees, disband its Police Department and turn over its entire municipal operations to a neighbor — an action that appears to be without precedent among California cities.
Several cities in the state have said that they are close to bankruptcy because of the sharp drop in sales and property tax revenues caused by the deepest recession in decades. But experts who track California cities say Maywood is the only case they know of in which a city has dismissed all top positions except for the city manager, city attorney and elected officials.
From this piece, it doesn’t sound like Maywood California was a particularly well-run city even before the recession hit, but this is certainly emblematic of a worst-case scenario for municipalities facing major budget deficits. There are towns here in Maryland – one of the states that has weathered the recession relatively well (emphasis on relatively) – that could find themselves in a similar situation if revenues are not up sharply next year.
Part of that is just hoping and praying for a national economic recovery, but part of it is also making some decisions at the state and local levels that are unfortunately easy to run against in re-election bids, and are therefore rarely made in even-numbered years. One side doesn’t want services cut, the other side doesn’t want taxes raised, and the truth is that unless both are done, we’re going to end up with a lot more places like Maywood California.
From the article it sounds as if the real reason is the city’s own mis-management not the recession. Even in the best of times, city has to be well run. Not to mention that Maywood is a sanctuary city and I doubt that the illegals help matters.Report
Do you think it’s possible that a state can do the same thing? If so, California as a whole can’t be that far behind trendsetter Maywood.Report
@Transplanted Lawyer,
I don’t think a state declaring bankruptcy is provided for in the Code, as Chap 9 only deals with municipalities. As a sovereign, the state can always raise taxes to cover its debts. However, I can still hope that CA goes belly up.Report
@Transplanted Lawyer, Absorbed by Nevada and Oregon?
Would either want it?Report
@Transplanted Lawyer, States can’t go bankrupt. As sovereign entities can they can technically default, but this hasn’t happened for a very long time. The question now would be whether the federal courts would actually allow a full-scale default on state debt.Report
This whole issue raises the question of why mini-cities exist in the large urban areas. If you think about it it makes more sense to let the sheriff do the policing, as the overhead is spread across more area. Police and fire are best done on a wide area basis, the small city is because at one time someone was afraid of the big bad city of LA taking over. And to provide more chances for politicians to make money on zoning and the like.Report
@Lyle, Small cities provide some healthy variation in regulations and zoning that wouldn’t exist if the big conglomerations were just merged into their major cities. Its true that the big public safety services are probably better provided by the county, but I’d much rather have zoning, parking, parks, and schools handled closer to the consumer – round here at least it provides some healthy variation.Report
@Simon K, In Ca as elsewhere the schools have nothing to do with the municipality being a distinct layer of government, but again sooner or later the US will go to statewide school districts for efficiency.
The small town does mean that the zoning can be run for the benefit of the politicians of the town who may well just happen to be in the real estate business. (That should be ruled a conflict of interest and banned)Report
@Lyle, That’s what I was gonna say – real estate bribery also probably works better when closer to the
briberconsumer.ReportI read where the city was ripping off illegals to raise revenues.Report
@Mike Farmer, Seems at one point they were exploiting civil forfeiture rules to take cars from illegal immigrants, but since became a “sanctuary city”. Obviously they have a big illegal population – not surprising the city is badly run when they have a choice between persecuting a big chunk of their population and pretending they don’t exist.Report
@Simon K,
I guess by persecuting you mean enforcing the law? The article doesn’t say that the cops just busted illegals only or just Hispanics. I guess the real point is that you shouldn’t break the law.Report
@Scott, I’m talking about using civil forfeiture as a method of revenue raising to make up for the fact the city doesn’t get normal tax and fee revenue from many of its residents. Regardless of what you think of it, its not enforcing the law since its a purely civil procedure. I doubt the city cops spend much time “busting” illegals.Report
Upstate New York has had the same problem for years. I remember at one point Erie County was cutting back on services: closing some libraries, cutting trash pickup in half, limiting 9.1.1. services, etc. People were, naturally, up in arms. “I love my library and I vote!” bumper stickers were popular. Eventually the state caved. They still can’t afford these services. Now they’re trying to raise money by adding a tax to soda pop. People are furious. So the two messages are: 1. “Dont’ raise our taxes!” and 2. “Don’t cut our services!” And they tend to come from the same people in my experience.Report
@Rufus, The city and county I live in both just voted parcel taxes to support the libraries. It required two-thirds, too.
And they tend to come from the same people in my experience.
The same ones who think that BP has a moral obligation to further screw over the residents of the Gulf, so as to protect their shareholders.Report
@Mike Schilling, Well, I think Ms Kramer’s right about Democrats wanting to preserve services and Republicans wanting to cut taxes. In my experience though the average voter’s opinion is something like, “They should cut taxes and increase services! After all, we voted for them!”Report
@Rufus,
No, Repubs don’t like the typical Dem reaction to everything which is to first raise taxes instead of first deciding if gov’t really needs to be paying for everything and seeing if you can actually cut unnecessary expenses.Report
There have been stories kicking around for at least the last 12 months or so involving the possibility of bankrupt municipalities (most of which I hear through the financial press as these stories tend to involve the likelihood of default on any outstanding municipal bonds).
While not nearly as drastic a situation as this one, I remember hearing about drastic cuts in services taking places (or pending) in Colorado Springs after voters rejected an increase in property taxes.
Making matters worse at the state level are the unfunded pension obligations.Report
@Dave, the drastic cuts in Colorado Springs have resulted in fewer police on patrol, so they’ve enlisted taxi cabs as “COP” (citizens on patrol) or something like that. Basically roving vehicles that call whenever they see something shady.
Many street lights have been turned off but *YOU* can adopt a streetlight for a couple hundred dollars and ensure that it’s turned on.
The newspaper ran a bunch of letters to the editor from local businessmen that said “our managers make X dollars a year… why are your managers making 5X a year? This is a spending problem!!!”
And, surprising everyone, the city has not gone to hell in a handbasket.Report