http://finance.yahoo.com/news/stockton-california-file-bankruptcy-city-070500463.html Oh look, public sector unions are at the heart of the problem. “Stockton's bankruptcy will probably resemble the 2008 case of another California city, Vallejo, which exited court protection last year, bankruptcy attorney Dale Ginter said . Both cities have been hurt by high labor costs, particularly health insurance for retirees, he said.”
I find this story a sham. They're saying it all happened because of retired medical insurance. Bull$hit. How about checking out retirement packages and bennies to the big guys. They brought it on themselves with their liberal ways starting back 40 years ago. OH.. and do I dare mention the requirement to take care of all the illegal aliens medical etc. These border hoppers come here, get what they want without paying a thing... and Obama says it's the way it should be. Of course a Left wing California article won't mention that.... it's all about the retired who worked for 30 years, paid taxes etc. Wet backs pay for nothing and cost us lots.
This is a foreboding of the future not only for other California cities but the entire state as well. If the Feds were not able to print money and vote to increase the debt limit, this would be happening in DC also. It is the result of many things. Debt is out of control. The current governor of California predicted this would happen the last time he was governor, and he blames it on insufficient tax revenues from the property taxes. What happened is that property valuations were capped by referendum legislation, which though popular, kept property taxes low, and allowed disposable incomes to inflate house values to take up the difference. In other words, with the burden of the property tax being less, people were able to pay more for the inflated cost of the homes. As a result the state has been getting lower revenues, as have the cities and counties as well. Has nothing to do with liberal or so-called conservative policy. The problem has been adding up over time, as the state and the cities have been borrowing more and more. Now they cannot borrow anymore. The greatest burden is now from the retirement pension obligations, yes. And the only way to restructure those is through bankruptcies. Essentially it is the same strategy that the airlines have used. The surprising thing is that the cities are starting to do it now. Next it will be the whole state. NY recovered from a crisis like this. It will be interesting to see how California reacts as well. Stockton and Vallejo are precursors to even more financial disasters like this.
Crabtree we need you for Governor of California. Want the job? I know, you don't want the pay cut. :D
Try reading, LOL It's going to hurt them now, but the root cause was from what they did below. Expecting the boom times to keep coming.
While I would do an outstanding job of leading not only CA but other troubled states out of financial ruin, you nailed it. Too low of pay for the grief. CA is not the only state being crushed by debt which is in large part due to public sector unions. Their bennies are not sustainable and we will see more states fold as they can meet the demands of union healthcare and pensions and other sweet goodies that were promised long ago by people hoping to get elected (people that knew they would be out of office by the time the shoe dropped on these bad decisions)
