Once bankrupt, Vallejo still can't afford its pricey pensions


#1

money.cnn.com/2014/03/10/pf/vallejo-pensions/index.html?iid=s_mpm


#2

Vallejo is in bad shape. In part, this is due to poor fiscal planning during the go-go years of Californa’s economy. Underfunding the pension funds put the city behind the 8-ball, even before the economy turned sour.

The article mentions the collapse of the housing market, and the high foreclosure rate, as contributing to Vallejo’s problems. The dramatic loss of its tax base crippled the city. However, the article doesn’t mention the closure of the Mare Island Naval Shipyard (mid-1990’s), which took away 10,000 direct jobs and an additional 15,000 jobs indirectly. I don’t think the city ever recovered from that. The city and surrounding area still has 16% unemployment.

Toss in the rising crime rate, due in part to the increased poverty and in part due to the sharp reduction in the police force, and it is not surprising that people are abandoning the city to live elsewhere. All of this drives down real estate prices, which means the tax base remains too low for the city government to recover.

I hope Vallejo can avoid a second bankruptcy. It has enough on its plate already.


#3

Coatimundi, what do you have to say about other Bay Area communities such as Benicia, Concord, and Antioch?


#4

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