In a welcome, common sense ruling, Court lets Stockton, Calif. cut retiree health care A federal bankruptcy judge on Friday cleared the way for Stockton, California to cut health care benefits for retirees while it is in bankruptcy proceedings. Stockton is seeking Chapter 9 protection from its creditors and said that it would cut retiree...
First, Vallejo, in 2008. Next, Stockton, then Mammoth Lakes and, now, San Bernardino and soon, perhaps, Compton. As Orange County Supervisor John Moorlach told Bloomberg News, the bankruptcy dominoes are starting to fall. One California city after another – following a decade-long spree of ramping up public-employee pay and pension benefits, as well as redevelopment...
Editors Note: It remains an article of faith among public sector union defenders of defined benefit pensions – as they are – that “the market’s just taken a little beating,” and “the long-term outlook does not merit a crisis mentality.” Even pension fund managers, such as City of San Jose’s Police and Fire Retirement Plan...
When you see headlines like this: San Bernardino, California, Weighs Chapter 9 Bankruptcy, you know 100% without a doubt the city is bankrupt, and the only question pertains to the filing. From the Bloomberg headline story …. San Bernardino may become the third California city in two weeks to file for municipal bankruptcy protection, as...
First Vallejo, then Stockton, then Mammoth Lakes and now San Bernardino. As Orange County Supervisor John Moorlach told Bloomberg News, the bankruptcy dominoes are starting to fall. One California city after another — following a decade-long spree of ramping up public-employee pay and pension benefits, as well as redevelopment debt — are becoming insolvent. Not...
Still unappreciated among defenders of public employee pension benefits is the extreme sensitivity of projected rates of return on investments to the amount government payroll departments have to fork over to the pension fund managers every year. Equally unappreciated is the possibility, if not certainty, that the rates of return currently being used by pension...
Scranton, Pennsylvania’s, the state’s sixth-most-populous city (population of 76,089 in 2010 census), is down to its last $5,000 and has no way to pay salaries. The mayor wants an immediate tax hike of 29% and 78% over three years. In every sense of the word, Scranton is bankrupt. NPR reports Scranton’s Public Workers Now Paid...
Headed into the 2010-11 school year, one could have easily assumed that the Los Angeles Unified School District had no money to waste. The district’s budget deficit stood at $640 million. More than 2,000 employees had just been laid off. The school board had just approved a deal giving teachers five unpaid furlough days, and...
The city of Stockton, California, is Bankrupt. It has stopped making bond payments and will become the largest city in the US to seek protection via US bankruptcy law. The bankruptcy was inevitable. California law requires blame to be assessed. To be sure there is plenty of blame to go around. Here are a few...
On June 9th Reuters ran a story entitled “California’s Brown set for fight over pension reform” that has some interesting quotes from his Democratic counterparts in the state legislature. According to the article, Warren Furutani, an assembly member representing Long Beach. who co-heads a joint committee that will craft pension legislation, had this to say:...
California, like Greece is perpetually in fiscal trouble. Overoptimistic revenue forecasts coupled with spending $2 billion more than expected has California in a deep hole. Governor Jerry Brown has the same non-solution as ever, hike taxes. Brown wants a “temporary” (as in seven years) tax hike. Given we all know there are no such things...
A new USC study pointing to a much-slower population growth rate in California has been greeted by demographers and urban planners as good news, in that it supposedly gives our state’s leaders a little breathing room to plan better for the future. The rate of growth has slowed to about 1 percent a year, the...
Governor Pat Quinn rammed through the largest tax hikes in Illinois history last year. On January 13, 2011, Governor Pat Quinn signed off on a 67% hike in personal income taxes and a 46% hike in corporate taxes. The result is not what the governor thought. Businesses have fled, more have threatened to leave and...
The proverbial can will rust away to nothing if it is kicked often enough. That is what Police in Stockton, California have found out and that is what the pensioners in the entire Illinois retirement system will soon find out. Stockton Can Suspend Police Accrued Vacation Payouts A California Superior Court Judge says Stockton Can...