City of Vallejo files for bankruptcy

Is the California city an outlier or the canary in the coal mine?  Vallejo, California filed for bankruptcy today as the first city put underwater by the foreclosure and housing crisis. With property values declining and folks lined up for reassesment of property taxes local governments who have lived like kings on bloated real estate tax revenues are going to see lots of red ink in the near future.  Will Vallejo be the only or the first?  I imagine that they'll only be the first, with cities outside of 25 miles from the coast being the suspects to keep an eye on. From the San Jose Mercury News on the Vallejo bankruptcy: The city of Vallejo filed for bankruptcy protection Friday to deal with a ballooning budget deficit caused by soaring employee costs and declining tax reven