Vallejo, California, austerity model

Vallejo becomes the model for post-bankruptcy urbanism – is this the future some people would like to see in American cities?:

VALLEJO, CALIF. — The first couple of years were ugly. After this working-class port city became the largest in America to declare bankruptcy in 2008, crime and prostitution surged as the police force was thinned by 40 percent. Firehouses were shuttered, and funding for libraries and senior centers was slashed. Foreclosures multiplied and home prices plummeted.

But then this city of 116,000 began to reinvent itself. It started using technology to fill personnel gaps, rallying residents to volunteer to provide public services and offering local voters the chance to decide how money would be spent — in return for an increase in the sales tax. For the first time in five years, the city expects to have enough money to do such things as fill potholes, clear weeds, trim trees and repair tennis courts.

The dire conditions, however, have made California a laboratory for how to run cities in an age of austerity.

Declaring bankruptcy used to be a last resort for cities, not only because it would cripple their ability to borrow for years to come but because of the blow to their reputation. But that attitude has started to change as more cities have found themselves facing fiscal catastrophe; bankruptcy offers an opportunity to start over with a clean slate.

Vallejo is in a markedly different situation. While it still faces some serious challenges — crime continues to be a problem, and the housing market remains depressed — the city’s finances are doing so well that a federal judge released it from bankruptcy in November.


“We’re seeing a lot of cities around us that are where we were five years ago,” Gomes said. “Some of those cities were laughing at us back then. It’s nice to be on the other side of it.”

While its general-fund budget of $69 million for 2012-13 is a far cry from the $85 million at its peak in the 1980s [for roughly the same number of people!], Vallejo is in much better financial shape than many other cities around the country.

Assistant City Manager Craig Whittom, who has worked in Vallejo since 2003, said the bankruptcy may have been the best thing to happen: “It was effective at helping us re-create ourselves and change the culture so that we could restart from a stronger financial footing.”

What is Vallejo really like now? It seems that the “clean slate” that makes bankruptcy appealing is not about future economic prosperity, but just about shrinking the role of government. I’d love to dig into the budgets from the 1980s and figure out what Vallejo’s residents have lost over the past decades. Sounds like a good excuse for a trip inland.

Read: Vallejo, Calif., once bankrupt, is now a model for cities in an age of austerity – The Washington Post.