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ReutersSAN FRANCISCO, Feb 21 (Reuters) - Vallejo, California, a former Navy town northeast of San Francisco, may file for bankruptcy because its employee costs are rising too much as its revenues slow, a City Council member said on Thursday.
Officials in the blue-collar town between San Francisco and the state capital of Sacramento expect a $4 million budget surplus to swing to a $6 million shortfall by the end of the fiscal year in June. They anticipate that deficit to widen more next year.
"As of April, we will not have the money to pay employees," Vallejo Councilwoman Stephanie Gomes said in a telephone interview. "It's just projected to get worse and worse.
"If we can't get all the pieces to come together ... then the city should declare bankruptcy," Gomes said.
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"Bankruptcy has been talked about casually for about the last year or so ... In December, it started to be looked at seriously," Gomes said, noting the City Council could vote to take the plunge next week.
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