The City of Vallejo is reported to be on the verge of bankruptcy. Over the last few decades politicians have granted excessive wage and benefit increases in exchange for election support from city employee unions. Pensions and medical benefits are incredibly generous, even before accounting for schemes such as DROPs (Deferred Retirement Option Plans), which allow city employees to retire with six or seven digit lump sums in addition to their pension and medical benefits. Vallejo is simply the first city to hit the wall, as declining revenues meet increasing expenses, not counting San Diego which seems to have been malfeasance as much as anything else.