Jun 25, 2012

Beleaguered Stockton, battered by the recession, fiscal mismanagement and plain bad luck, is poised to enter the history books as the largest American community to declare bankruptcy. The trigger could get pulled as early as Tuesday. 


From the Bee's Peter Hecht: "Local real estate values quadrupled between 2000 and 2006. City tax revenues skyrocketed. Stockton's general fund was growing by 10 percent a year. The port city redeveloped its waterfront and built a new arena. It gave pay raises to cops and cut deals in 2007 to boost pensions and pay for other employees."


"Now Stockton is broke."


"After years of bad budget decisions based on an overly rosy reading of the economy, Stockton – population 292,000 in 2010 – this week faces the ignominy of becoming the largest city in America ever to file for bankruptcy."


More on Stockton: A few years ago, Stockton seemed to be doing fine, but now is on the edge of declaring bankruptcy, the victim of an array of fiscal maladies that include poor money management and the sprialing health care costs of retirees.

From Bobby White in the WSJ: "On Monday, a state-required mediation with creditors to find a fiscal solution is scheduled to expire. Stockton's City Council is then slated to meet Tuesday to decide whether to adopt a budget for operating in bankruptcy, a move widely considered the last step before the city formally submits a Chapter 9 petition to federal bankruptcy court."


Meanwhile, critics contend that two justices should not have participated in a case involving the Boeing Co. because they owned stock in the firm.


From Jennifer Gollan in the Bay Citizen: "Two California appellate court justices may have violated state conflict-of-interest rules by hearing a multimillion-dollar case involving Boeing Co. while they owned stock in the company, according to court documents and financial disclosure forms obtained by The Bay Citizen."


"Associate Justice Elizabeth Grimes and Presiding Justice Patricia Bigelow were part of a 2nd District Court of Appeal panel considering whether to overturn a $603 million fraud and breach-of-contract verdict against Boeing and one of its subsidiaries, but they recused themselves from the panel before it ruled in Boeing's favor in April, documents show..."


"In May, ICO Global Communications, which won the jury verdict against Boeing in 2008, asked the state Supreme Court to review the appellate court's decision, arguing that the justices should have immediately recused themselves because they owned stock in the aerospace giant."


The Brown administration has reached an agreement with SEIU Local 1000, which represents nearly 95,000 state workers -- the largest state-employee union.


From the LAT's Chris Megerian: "California's largest state worker union announced Saturday that it reached a deal with Gov. Jerry Brown's administration to cut compensation for its members."


"The union, SEIU 1000, said salaries will be cut 4.62% for one year starting July 1. Employees will be able to take eight additional hours off per month at their discretion, the union said."


"The union also said the state agreed to reduce its ranks of student assistants and retired annuitants, who are workers drawing a pension and a salary at the same time."


Speaking of money deals, the budget agreement approved by the governor and Democrats will keep the present tuition levels in place for CSU and UC, clearly a response to the public outcry over the rising costs of higher education. The Bee's Kevin Yamamura tells the tale.


"The state budget will freeze tuition rates for the state's two university systems if voters approve tax hikes in November, University of California student groups said this evening (Sunday)."


"Charlie Eaton, a leader with the UC student workers' union, said Capitol officials told him that the budget bills will add $120 million each for the UC and California State University systems to avoid tuition hikes. But that is contingent on voter passage of Gov. Jerry Brown's tax hikes in November, he said."


"The tuition freeze announcement could not be immediately confirmed by Capitol officials."


It probably won't come as a surprise to Golden State drivers, but California is among the five states with the highest auto-repair costs, according to a new study.


From the LAT's Hugo Martin: "CarMD, which sells automobile diagnostic systems, analyzed more than 160,000 repair bills given to drivers in 2011 who pulled into auto shops because the "check engine" light came on."


"The average nationwide cost of repairs in that situation was $334 in 2011, down 6% from 2010, primarily because of a drop in labor costs, the study found."


"But the average cost of those repairs were higher in Wyoming ($389), Utah ($379), California ($368), Montana ($364) and Arizona ($363), according to the study."


And from our "New York, New York"  files comes word that NYC Mayor Mike Bloomberg is so fed up with speeding drivers -- a common quantity in the Big Apple -- that he wants the offending motorists publicly shamed.


"Unhappy with Albany’s pace, Mayor Michael R. Bloomberg suggested on Friday a different tack: public shaming of leadfooted drivers."


“We’ll put up their names and pictures someplace,” Mr. Bloomberg said on his Friday radio show. “Maybe we can shame them, and we should look at that, because if Albany is not going to let us do this stuff, we’ve got to save lives.”


"The cameras record the speeds of passing cars, snap a photograph of the license plate, and automatically issue a violation. The city had hoped to issue fines up to $100 for multiple offenders."


"Mr. Bloomberg came upon the shaming idea while thinking about ways to use the cameras without raising revenue from the violations, which the city is blocked from doing until Albany gives permission."


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