Another California municipality has collapsed financially, with the city of Stockton filing for bankruptcy under Chapter 9.
This is merely the latest in a series of municipal bankruptcies plaguing the Golden State. Far too many of the municipalities believed the good times would never end and promised things to their citizens and employees based upon that belief. However reality has proved them wrong, the bills have come due, and their coffers are empty.
State finances aren't in any better shape, with a projected $16 billion budget deficit in the offing. Unfortunately, unlike the cities and towns in California, the state cannot declare bankruptcy, meaning the taxpayers (what's left of them) are obligated to pay off the state's deficiencies. But as the state assembly and the governor are learning the hard way, raising taxes any more than they already have will not raise more revenue because the state is already on the wrong side of the Laffer Curve. The last round of tax hikes caused revenues to fall, leaving the state even deeper in debt.
How they believe yet another round of tax hikes will solve their problem makes me wonder if there is anyone sane left in the upper echelons of state government. Unfortunately the answer appears to be 'no'.