A few years ago, California’s state government and its cities were flush with cash as the feds dumped $600 billion in stimulus funds into the state. Like all good parties, this one couldn’t go on forever. As the spigot closed, inflation spiked (gee, maybe there’s a connection?) and the economy slowed, the state budget went from a whopping surplus to stubborn deficits. Cities struggle to balance their budgets.
Media attention has focused on the travails of big cities such as Los Angeles, but smaller cities might be the canaries in the coal mine. Enter the city of Orange. Last year, the city faced a $19 million deficit—quite astounding for a city with revenues of around $145 million. Like most big-spending officials, the…