Tag archive for Stockton

Watch door to bankruptcy slam shut to protect pensions

In the wake of Judge Klein’s ruling last week that Stockton could cut pension debt in bankruptcy, fiscal reformers and conservative commentators where quick to assume, somewhat naively, that this ruling changed everything and would force recalcitrant unions to the negotiating table. The truth, however, is that many states put up numerous roadblocks to municipal bankruptcy and the real import of the ruling was that states where public unions dominate were likely to throw up even more blocks. Now we’ve seen the first indication of this…

Stockton must face last angry creditor

Bankrupt Stockton heads to court on Monday to win approval for its plan to exit Chapter 9, but it still has not crafted an agreement with one The-U.S.-Government-Is-Our-Biggest-Creditor-and-Other-Statisticsmajor creditor, Franklin Advisers, which is being asked to take a gigantic haircut in the case. Instead, Franklin will argue that Stockton hasn’t done enough to cut its debts, especially its pension costs.If Franklin can’t persuade U.S. Bankruptcy Judge Christopher Klein to force Stockton and Calpers to come to some kind of deal reducing the city’s pension debts…

Stockton: What doing nothing about pensions will cost

A recent story in the New York Times noted that Stockton was exiting bankruptcy and returning to solvency but without addressing its crushing pensions debt. What exactly does that mean in terms of the city’s budget? The Times story doesn’t quite say, but it’s easy …

San Bernardino is bankrupt: three lessons

Federal law requires cities to pass a series of eligibility tests before they enter bankruptcy in order to prove that they’re truly in a desperate state and have no other options.
The eligibility process is not pro forma; many cities have failed it, most notably Bridgeport, …

Debating California’s revival: joblessness

A lively debate continues on whether California is experiencing a robust recovery, with some commentators even suggesting that President Obama needs to learn from Jerry’ Brown’s managing of the Golden State’s woes. My own take is that both sides in this debate have managed to …

Putting the worker back in ‘worker contributions’ to pensions

The big idea for controlling the cost of government worker pensions in Oregon is to have workers go back to making their 6 percent employee contribution to the state’s pension system. Although the system was designed to have workers contribute, over the years the state …

Wealthy Sonoma faces similar problems to Stockton

Defenders of the state’s fiscal status quo routinely argue that bankruptcy and deep fiscal problems are not a statewide threat — that they only are a problem in poorer, terribly managed cities such as Stockton, Vallejo, San Bernardino and the like. That ignores the major …

CalPERS’ actuarial magic: can’t have it both ways

The main drama in Stockton’s bankruptcy proceedings concerns a fight between CalPERS and a group referred to in legal documents as the “Capital Markets Creditors” (two bond insurers, a money manager, and a bank (herein “creditors”)). The latter argue that CalPERS is just another “garden …

The Stockton ruling: judicial activism or restraint?

When Judge Christopher Klein ruled last week that Stockton was eligible for bankruptcy, many conservatives were disappointed. To them, the ruling represented yet another win for public employee unions and CalPERS, the same crowd to whom they assign responsibility for Stockton’s collapse.
Well, it certainly wasn’t a loss …

San Bernardino rolls over after Stockton verdict

Some pension reformers have taken heart in U.S. bankruptcy Judge Christopher Klein’s Monday decision allowing the city of Stockton to proceed with its bankruptcy over objections by capital market creditors who say it’s unfair that the city plan failed to take on the city’s payments …