The next municipal bankruptcy?

Yet another city is heading toward bankruptcy. Desert Hot Springs, Calif., a city of 26,000 in the south-central part of the state, warned it could run out of money as soon as March 2014. If that occurs, the city could be forced to file for bankruptcy. If that happens, Desert Hot Springs will be the...

Yet another city is heading toward bankruptcy.

Desert Hot Springs, Calif., a city of 26,000 in the south-central part of the state, warned it could run out of money as soon as March 2014. If that occurs, the city could be forced to file for bankruptcy.

If that happens, Desert Hot Springs will be the third city to file for bankruptcy in California after Stockton and San Bernardino.

The city’s reasons are familiar: burdensome salary and pension costs that have overwhelmed the city budget. Nearly 70 percent of Desert Hot Springs’ budget is spent on police salary and pension costs.

City Council Member Russell Betts, said to Reuters: “It’s obvious we can’t continue with salaries and pensions that are in the stratosphere, no matter how much love there is for our police department.”

Desert Hot Springs’ situation is the latest example of a serious national problem: local governments are being overwhelmed by pension costs.

Chicago’s recent triple-notch credit downgrade by Fitch Ratings brings this national crisis closer to home. Chicago taxpayers should be on notice. The hidden bill for Chicago debt is more than $60,000 per household.