Los Angeles News

Will LA be the next city to go bankrupt?

Wednesday, July 11, 2012

The San Bernardino City Council decided to file for Chapter 9 bankruptcy protection Tuesday, making it the second largest city in the nation to ever file for bankruptcy.

San Bernardino faces a $46 million budget shortfall and may not be able to pay all its employees over the next three months. Meanwhile, residents don't know what to expect.

Two weeks ago Stockton, in Northern California, became the largest city in the country to ever file for bankruptcy. And the tiny town of Mammoth Lakes voted for bankruptcy last week.

The city of Los Angeles has serious money problems. Mayor Antonio Villaraigosa says the city has cut a third of the general fund civilian workforce. But Villaraigosa says the city will never declare bankruptcy as long as he's mayor. Term limits force him out of office next summer.

"I can't guarantee that they won't happen under somebody else's watch, but I can tell you under mine, I will make the tough decisions," said Villaraigosa.

Those decisions, he said, include layoffs of more civilian employees if necessary to balance the budget and avoid bankruptcy.

"Which is why I've said, if necessary, I will lay off as many people as we need. But let's be clear, we're not there yet," he said.

Villaraigosa promises he will never layoff LAPD officers. However, LAPD Police Chief Charlie Beck says his department has taken a $120 million budget reduction and can't pay officers overtime.

"I also laid off more civilian employees than any other city department in the last round of budgets," he said.

While in Los Angeles, Gov. Jerry Brown refused to speculate about whether the bankruptcies are part of a pattern.

"I believe California is slowly coming back," said Brown. "Revenues are coming into the state but there are many cities that are still struggling and we'll do whatever we can to help the cities."

The governor wasn't specific about what form the help might take.

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Tags:
budget, economy, antonio villaraigosa, charlie beck, jerry brown, los angeles news, john north
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