The WSJ today reports some expenditure details of Vallejo, northern California, pop. 117,000. Vallejo declared bankruptcy earlier this year after having unsustainably ramped up public spending in response to unsustainable tax revenues stemming from unsustainable property-values stemming from unsustainable mortgage-lending practices.

Over the last decade, the Journal reports, state and local practices pushed Vallejo’s public-sector wages, particularly in the police department, to ridiculous heights. Plus, following California law, Vallejo allows officers and firefighters “to retire at 50 years of age with 3 percent of their highest salary — multipled by the number of years served,” the paper notes. In 2005, Vallejo hiked officer salaries by 20 percent; including benefits, the total cost of each officer today is nearly $200,000 annually.

Now, Vallejo is cutting back, with deterioration in the city’s quality of life evident.

It’s true that Vallejo competes with Jefferson County, Alabama, to be the worst-managed municipality in the United States. But Vallejo differs from many other U.S. cities and states not in kind but by degree.

Over the past five years, New York, for example, has increased spending on municipal salaries, pensions, and health benefits by 22 percent after inflation. And, as E.J. reports in the post below deck, the city continues to approve similarly outsized increases.

The problem is that in a downturn, these payments are sticky while revenues are slippery. And since it’s hard to cut back current salaries or even future benefits after revenues slide, the city will be tempted to cut back on people, including more police officers than the 1,000-police-officer hiring delay New York has already budgeted, if things don’t get better fast.

You may also like

Another Hochul To-Do: Timely Financial Reporting

The state will spend a record $212 billion in the current 2022 Fiscal Year, under the budget its elected leaders adopted in April. Read More

Health Research Inc. Turns Over its Payroll Records Despite Claiming To Be Exempt from FOIL

The full payroll records of more than 2,400 de facto state employees are available to the public for the first time after being released by Health Research Inc. Read More

Emergency Billions Pose Opportunity—and Risk—for NYS Schools

New York schools are to post publicly today plans for spending a huge pile of unexpected and unbudgeted cash. Read More

New York’s Medicaid Rolls Kept Pace with a Nationwide Surge During the Pandemic

New York's Medicaid and Child Health Plus programs added three-quarters of a million enrollees during the coronavirus pandemic, roughly matching the pace of a national surge in sign-ups. Read More

New York’s Medicaid and Public Health Crises Get Short Shrift in the New State Budget

In spite of an ongoing pandemic and spiraling Medicaid costs, New York's health-care system received surprisingly little attention in the new state budget. On issue after issue, law Read More

Empire State’s new budget is a bridge to nowhere

Looking ahead to an uncertain post-pandemic recovery, New York’s newly enacted state budget for fiscal year 2022 raises spending by staggering amounts that—barring an unlikely rapid return to peak 2019 economic activity in New York City—can't possibly be sustained for more than a few years. The budget is a mid-2020s fiscal disaster in the making: an incomplete bridge over a deepening river of red ink. Read More

Schumer’s First Spending Bill as Majority Leader Tailors Money for New York Medicaid

The pandemic relief bill includes a boost in Medicaid funding that appears to be tailor-made for Senate Majority Leader Chuck Schumer. Read More

A Letter From Washington Shrinks New York’s Budget Gap by $2 Billion or More

In a letter to governors two days after President Biden's inauguration, the U.S. Department of Health and Human Services said that the pandemic-related federal public health emergency "will likely remain in place for the entirety of 2021." Read More


Sign up to receive updates about Empire Center research, news and events in your email.


Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100

General Inquiries:

Press Inquiries:


The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!