Time has already run out for some governmental bodies that spent as if there was no tomorrow.
San Bernadino, Calif. — a community of 210,000 people located near Los Angeles — is the latest California city to go belly up. The city council voted to file for bankruptcy on Tuesday, becoming the third city in the Golden State to file for bankruptcy in the past three weeks.
San Bernandino was preceded by Mammoth Lakes, a small community, and Stockton, a city of 300,000.
Once again the source of the problem is years of reckless spending and dishonest financial reporting. Authorities said that San Bernadino city officials have been hiding the city's ever-weakening financial standing by submitting false accounting to the city council.
The city faces a $48.5 million budget deficit and may not be able to continue to meet its payroll. However inviting bankruptcy may appear to some in the short term, the cost of reneging on its debts will be staggering.
It's not just California cities that are having problems as years of overspending and lavish employee pay and pension benefits wreak havoc on the finances of states and localities.
In Scranton, Pa., the mayor slashed all city employees' pay to the minimum wage because he said the city doesn't have sufficient funds to pay more. In taking the action he did, Mayor Chris Doherty violated a judicial order directing that employee union contracts remain in force.
States, like Illinois, don't have access to the bankruptcy courts. But the Land of Lincoln is in far deeper debt than these bankrupt municipalities. So far, the state has escaped its responsibilities by refusing to pay its bills.
These warning signs should not be ignored. Reckless spending yesterday and today leads to devastating consequences tomorrow.