In 2008, Vallejo, Calif., was nearly broke. Faced with falling tax revenues, rising pension costs, and unmovable public-employee unions, the city was unable to pay its bills and declared bankruptcy. A report issued by the Cato Institute last September noted that 74% of the city’s general budget was eaten up by police and firefighter salaries and overtime along with pension obligations. The average city in the state spends 60% of its budget on those things.
What they’re finding is that even bankruptcy may not be enough to break the grip unions have on the public purse.