Skip to comments.Cash-strapped Stockton (CA) votes to file for bankruptcy
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 ...
Obama world-more to come!
Welcome to the club, bro--we've been saving seats for you guys for a few years now.
Al the while we capt saying you cant afford to offer that, they kept on hiring and offering.
Take the needed money from the DNC to make good on the retirements.
Sadly the Dems have always know that the FED will cover the ridiculous DNC spending done here in CA.
It begins. More will follow.
Look for govt pension plans to be totally redone and greatly reduced. It’s what is killing many many cities, huge employee pensions that employees hardly have to put anything into, if at all.
Declaring bankruptcy is the only way cities can legally change a govt pension plan.
What kind of insurance costs $1,500 a month? I've got a great plan and the cost for my wife and I is $750.00 a month.
Need some help here, what am I missing on this one.
Great comment. Says a lot in very few words.
This is the case all over the country. City after city, every dime that comes in goes to support retired employees. And they are not the bad guys. The bad buys made the promises and didn’t fund them and they are long gone.
So what do you do? God knows but of the retirees aren’t willing to take less they are going to end up with nothing.
What kind of insurance costs $1,500 a month? I’ve got a great plan and the cost for my wife and I is $750.00 a month.
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
It must cost more than that because he says he can’t afford it if the city reduces its 1500 monthly contribution and we know the Union is probably matching the city funds (YEAH RIGHT) plus what he puts in.. oh yes, it looks like he is retired at 57, probably with a sweetheart deal also.
Like Rev Wright said “The chickens is comin’ home to roost”.
It must include vet bills for your pets and some extra vacation in there....
These people think they worked hard and I don’t deny they did but they did not create any wealth.
And this is the core problem. They consume more then they produced.
Don’t send Texas the bill.
California is doing OK because revenue is growing 20 times faster than spending.
Debt is decreasing and the state economy is growing.
Heck...all of Oregon is heading that way...
We have a plan thru the company my husband took early retirement from...costs us over $1000 a month for 2...we’re thinking of dropping it...since most of our bills aren’t covered anyway...it’s just hard to find catastrophic that is much cheaper than that.
It looks like Barry’s “recovery” is kickin’ in.
All U.S. cities need conservatism in them, very badly!
Does the home know that you've escaped, doofus?
Does the home know that you've escaped, doofus?
Of course the greedy unions are just as bad, or worse, than the idiots who agreed to absurd future benefits. They simply assumed that, whether future taxpayers could afford the absurd benefits or not, they would be forced to pay anyway.
Wrong, you idiots.
Simple math easily demonstrates that the agreements were impossible. Some were pointing it out and were summarily ignored.
The greedy's reach always exceeds their grasp.
And they continue indignantly to shrilly whine that they are the victims in the fraud or the incompetence.
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.
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.