Posted on 06/27/2012 9:25:58 PM PDT by Olog-hai
After desperately trying everything from huge budget cuts to secret negotiations with creditors, the Stockton City Council finally ran out of options Tuesday night and voted to file for bankruptcy.
The 6-1 vote was to authorize a day-to-day operating budget, called a pendency plan, that will go into effect when city officials file for Chapter 9 bankruptcy protection in federal court in Sacramento. That filing is expected Wednesday.
Stockton, a river port with 292,000 residents, will become the biggest city in U.S. history to vote itself into bankruptcy. The previous largest bankrupt city was Vallejo, which filed in 2008 and resumed solvency last year.
A federal judge will now be charged with deciding how much money on the dollar Stockton will pay creditors and how the city will restructure its budgets in the future.
Bankruptcy became the only option after the city failed to erase a $26 million deficit or to renegotiate millions of dollars it owes in retiree health benefits and on huge civic projects it built in the past decade. …
The benefits and civic projects, including a new arena and City Hall, were developed during the boom years of the early 2000s. But after the national housing collapse that began around 2008, revenues from property taxes and other sources dried up. …
(Excerpt) Read more at sfgate.com ...
There was a list floating around of about 21 cities watching how it went with Stockton under the new rules passed by the legislature that makes a waiting period of some sort. This could very well be just the tip of the iceberg.
The guy in the pic is 52 and retired????
Free healthcare for life and retire at 52. Nice work if you can get it.
we might see some kind of indexing or maybe a "surcharge" on large pensions, to try to recoup some money back...
PRESENT services will be cut just to keep the retirees fat and happy...
the whole situation is a two way street...workers demanding wages/benefits/pensions that they KNEW in their hearts was nothing more than insanity, and then those that kept buying votes and giving out such largess...
What the hell are you smoking man. What ever it is I am sure you could sell it for big bucks. Every small business owner I have known for the last 30 years is or has left the state; most of them to Utah or Texas. The unemployment rate in in this country exceeds 18%, unless you are a dope grower.
Need some help here, what am I missing on this one
Either run by AARP or the Union.
There’s no way some of these places will ever be able to pay their pensioners what they said they would. They have to as it’s their biggest underfunded expenses.
They made promises, but didn't fund them. Which means they spent the money on something else. Where did it go? What was the biggest budget item they spent it on instead? What is always the biggest budget item, current wages and benefits for current employees! They robbed their own future pensions, by taking higher up front wages. Higher than the taxpayers could afford if they were also to pay for the pensions, and higher than comparable private industry was paying. The decisions were made by their elected union leadership, colluding with their selected Rat politicians. What they did was, correctly, made illegal, for private industry, under Clinton IIRC. Do NOT feel sorry for them!
Feel sorry for the private taxpayers they're trying to hit harder, taxpayers who's own 401K pension funds have shrunk from a recession caused by the government (i.e. caused by the current whining class) while the whiners who caused it keep saying their purposely underfunded pensions should retain full value. Some of them fully understood what was going on. The rest, who claim to all be elites, should have understood it. Ignorance of the laws (of economics) is not a defense.
was this meant as a joke?
HURRY... JUST SELL MORE BONDS!!!
The guy must be a troll - since 05/19/2012.
Maybe I miss your point. What blame do you place on your elected representatives that agreed to a deal the taxpayers they represent could not afford?
I’m NOT joking.
Just look at the California state debt clock.
http://www.usdebtclock.org/state-debt-clocks/state-of-california-debt-clock.html
Revenue is growing MUCH faster than spending.
GDP is increasing and debt is decreasing.
That website is fraudulent. There is no information about sources of data, other than saying the values are verified from the best sources available. Well, I want to know what those sources are, and what “complex” formulas they are using. Because they are completely opposite of reality. Who owns the website? Who is behind it? Questions that can’t be adequately answered.
Gov Jerry Brown is in a bind, because actual state revenue reported a couple months ago is a fraction of what it was a year ago, and has fallen far short of estimated revenue. They estimate revenue when doing the budget, and estimates of revenue are always absurdly inflated. But reality is a b*tch, because actual state revenue has greatly declined from last year, and continues to decline.
People I know are shutting down their businesses, and moving out of California. One of my daughters and her husband moved his business to Austin, Texas, where business is booming. Another daughter and her husband are building a business in Iowa, away from California. The facts are, California is bad for business.
Side note: how in the world do they call taxes a revenue is just mind boggling.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.