From The Los Angeles Times:
Maywood, a small working-class community south of downtown Los Angeles, plans to lay off all its employees, disband its Police Department and turn over its entire municipal operations to a neighbor — an action that appears to be without precedent among California cities.
Several cities in the state have said that they are close to bankruptcy because of the sharp drop in sales and property tax revenues caused by the deepest recession in decades. But experts who track California cities say Maywood is the only case they know of in which a city has dismissed all top positions except for the city manager, city attorney and elected officials.
From this piece, it doesn’t sound like Maywood California was a particularly well-run city even before the recession hit, but this is certainly emblematic of a worst-case scenario for municipalities facing major budget deficits. There are towns here in Maryland – one of the states that has weathered the recession relatively well (emphasis on relatively) – that could find themselves in a similar situation if revenues are not up sharply next year.
Part of that is just hoping and praying for a national economic recovery, but part of it is also making some decisions at the state and local levels that are unfortunately easy to run against in re-election bids, and are therefore rarely made in even-numbered years. One side doesn’t want services cut, the other side doesn’t want taxes raised, and the truth is that unless both are done, we’re going to end up with a lot more places like Maywood California.