California Cities May Follow Vallejo's Lead

A recent Wall Street Journal article mentions that the California cities of Isleton and Rio Vista may be forced to follow in Vallejo’s steps and declare bankruptcy. The cities are currently being crushed under increasing costs from wages and benefit for city employees while sales tax revenue is decreasing. The cities have already contacted the law firm that assisted Vallejo in their bankruptcy in order to explore their options. Other cities may start to consider this option as costs rise, including mandatory payments to CALPERS because of investment losses at the giant state pension fund.

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