City of Stockton Bankruptcy Approved
What does bankruptcy approval for the City of Stockton mean for other California cities? Perhaps it paves the way for other California cities (such as the City of San Bernardino who filed for bankruptcy protection in August) to do the same. According to Cal Watchdog, Your Eyes on California Government, the City of Stockton owes more in pensions than it can pay, and through bankruptcy, it can modify pension contracts, relieving them of some of their obligations. Will having the ability to modify pension contracts be incentive for other struggling California cities to file for bankruptcy? Maybe, but maybe not…. According to City Journal, “The Pension Fund That Ate California” http://www.city-journal.org/2013/23_1_calpers.html, when Vallejo emerged through Chapter 9 bankruptcy, it did nothing to reduce it’s pension costs. How do you weigh in?