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Reuters finds vicious circle of self-interest sank a California city

When San Bernardino filed for bankruptcy in August, the mayor blamed the city council and the police and fire unions. The unions blamed the mayor. Yet on close examination, the city’s decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward—and alarmingly similar to the path travelled by municipalities around America’s largest state. A Reuters investigation of city data found San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers. Little by little, the salaries and retirement benefits of city workers—and especially its police and firemen—grew richer and richer, even as the city lost major employers and gradually got poorer and poorer. No single deal or decision involving benefits and wages over the years killed the city. But cumulatively, they built a pension-fueled financial time-bomb that finally exploded.

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