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Home Solano County The Bankruptcy of Vallejo

The Bankruptcy of Vallejo

The bankruptcy of Vallejo, California, attacks on public sector workers, and what it means for the working class.

By Joel Schor

Posted on February 18, 2011 by the the Solano County Central Committee.

In May of 2008 Vallejo began to make the news in the Bay Area and world by a unanimous vote of its city councillors in favor of filling for Chapter 9 bankruptcy in San Francisco Federal District Court. In the weeks and months to come Vallejo's city manager Joe Tanner would support the case for bankruptcy by blaming the public sector unions - police, fire department, and electrical workers for pushing the cities general fund into the red. While the federal judge had ruled in favor of allowing the city municipal bankruptcy protection in September 2008, the rapidly downward fall in real estate prices would also entail a fall in property tax revenues for the schools and county services - which are supplemental to the city such as with sherifs who assist local law enforcement. Further, the real estate crisis is leading to a population flight from Vallejo due to foreclosures, which in turn lowers the city's revenue base from local economic activity. The push for bankruptcy was entirely focused on the unions as the culprits of Vallejo's economic troubles, and Stephanie Gomez emerged as an anti-union political force on the city council. In the midst of the bankruptcy proceedings, the unions came to the city offering $10 million in wage and benefit cuts. The offer was refused, and the cities negotiator claimed that employee wages and benefits were completely responsible for the $16million deficit in the general fund. The judges ruling in favor of bankruptcy, granting the city protection against its creditors, would make evident that dissenting views and a participatory dialogue over the cities priorities would not be tolerated.

City manager Tanner made misleading statements in 2007 to the press regarding a city funded public opinion survey, polling Vallejo residents on their support for higher taxes to pay for municipal utilities and emergency services. While claiming the public was opposed to voluntary tax assessments and refusing to release the results of the study, it was not until April of 2008 that the Vallejo Times Herald obtained the poll results and reported that there had been in fact a 53% margin of support for increased taxes. Tanner also attempted to forbade city employees from participating in public debate on the cities bankruptcy proceedings on internet forums, or making statements to the press. In the wake of costly and protracted negotiations in attempting to void the city employee union contracts, the council eventually put forward measure A to Vallejo voters in June of 2010. The measure called for the end of binding arbitration for city employees, and for the city council to have the final power in setting wages and benefits for city employees. Without binding arbitration any group of workers is deprived of their right to have contracts entered into through collective bargaining agreements enforced by law. A united working class movement which could bring Vallejos community together around issues such as the abuse of police power towards the homeless, minorities and youth, along with standing up for public sector workers is needed. The mismanagement of the city and local politics has encouraged long time Vallejo residents, Bob English and Linda Hewitt to become “fed up” in their own words, and leave to find another area for their retirement. Bob and Linda, both coming from unionized public sector backgroundsʼ, attended city council meetings during the bankruptcy deliberations and spoke against the tirade of local politicians demonizing city workers as the cause of Vallejoʼs economic problems.

The attack on public workers has taken on a national character with President Obama proposing a two year wage freeze for federal workers in January of this year, which has emboldened governors of various states to jump on the anti-public employee bandwagon. In a recent cover page edition of the The Economist Magazine, The Public Sector Unions - The Battle Ahead , articles inside make the case that local leaders need to show real bargaining strength against the “Leviathan” labor unions which impede social progress with their unruly power over monopolized social services. The article ends with a warning to local governments, and asks the question:

But will governments have the courage to tackle the root causes of the problem (such as pensions) rather than dealing with secondary problems (such as wages)? And will they dare tackle questions of power rather than just pay and perks? (The Economist, "Public sector workers (Government) workers of the world unite!", January 8th - 14th 2011)
The article of course does not mention how workers pension funds are often miss managed by contracted financial institutions at great speculation and risk. Further, when markets crash their is no accountability held on these outside investors who undertook risky and often self serving decisions involving public employee retirement funds. The attack on public sector employees is an attempt to weaken the working class as a whole. The Economist article is entirely correct that the struggle is not only economic but also political. The latest charge against public sector unions in the state of Wisconsin by Governor Scott Walker, has involved the threat of calling in the National Guard if labor unions will not concede to the governments demands on wages and benefits and also relinquish their collective bargaining rights. The hard won rights of working people to form labor unions and represent their interests in the workplace through collective bargaining are not the privileges of an elite as Obama, his Republican followers in local government, and the business press would articulate. The labor movement movement is crucial to the existence of democracy in a capitalist society. For both public and private sector employees, unions provide a voice in the workplace and a means of bettering the lives of working people.

An Injury to One is an Injury to All!

Joel Schor is a resident of Vallejo California, and a member of the Sailors Union of the Pacific. He is interim chair of the Solano County Central Committee. He may be reached at 707-980-6450 or dybenko - at - comcast.net.

 
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