Stockton, the Delta hub that is part agricultural linchpin and part gritty port town, has become the largest city in the U.S. to seek court protection from its creditors. The city council announced its intention to enter bankruptcy late Tuesday after 11th-hour negotiations with its creditors failed to close a $26 million deficit.
From Bloomberg's Steven Church and Alison Vekshin: "The city is fiscally insolvent and must seek chapter 9 bankruptcy protection,” Stockton said in a statement released yesterday after its council voted 6-1 to adopt a spending plan for operating under bankruptcy protection. “In addition to the bankruptcy petition, the city will file a motion with the courts to share information from the confidential mediation.”
"The budget for the fiscal year beginning July 1 calls for defaulting on $10.2 million in debt payments and cutting $11.2 million in employee pay and benefits under union contracts that could be voided by the bankruptcy court. The city of 292,000 may file its petition as soon as today."
“It’s a sad day in the city of Stockton,” Mayor Ann Johnston said before the budget vote. “I see no other solution to this.”
More on Stockton: At an emotional city council meeting, many in the audience included retirees who feared their health care will be cut -- a likely prospect.
From the Bee's Peter Hecht: "The cuts in health care benefits stirred an emotional response from numerous retirees, including Geri Ridge, a police records clerk for 26 years. Ridge told City Council members of the two heart attacks she suffered – the last that ended her career and nearly killed her. She said she lives on $1,895 monthly retirement income – but now faces the prospect of spending nearly every penny to replace her lost health coverage...."
"Gary Jones' voice cracked with anguish as he addressed the council. "If I lose this medical, for me it might as well be a life sentence," said the retired Stockton police officer who had surgery to remove a brain tumor and endured radiation treatment for the past year."
From Liam Dillon in the Voice of San DIego: "Monahan says the law should allow governments to make prospective changes to current employee pensions. In other words, she believes California courts should reverse their position and give governments the right to cut pension benefits for the time current employees haven’t yet worked."
"This change would give governments the chance to face their existing pension problems head-on by addressing the debt owed to current workers without infringing on employees’ contractual rights. These kinds of pension cuts, she contends, could even benefit workers. In the face of mounting budget pressures, she says, government employees might prefer pension cuts to salary freezes or layoffs."
"In short, Monahan concludes making current pensions untouchable is both bad law and bad policy."
And a final word on pensions: Here's an excellent article examining a dozen common myths in the emotional, heated debate over public pensions. Thanks to VoSD's Dillon for pointing it out.
Meanwhile, 45 miles north of Stockton at the state Capitol, lawmakers prepared today to vote on the remaining pieces of a state budget for the 2012-13 fiscal year that starts Sunday. The last-minute wrangling continues and those most dependent on the budget await the action with trepidation.
From Capitol Weekly's Greg Lucas: "Dual eligibility sounds great if it means a chance at winning two $500 million jackpots."
"But in government shorthand, “dual eligibles” are those persons who qualify for Medicare, the federal health insurance for seniors and the disabled, and Medi-Cal, the state’s health care program for the poor.
The Legislature is scheduled to vote today on a budget bill that will sharply change how most of the state’s dual eligibles receive health care. California’s 1.1 million dual eligibles – and the 8 million in other states -- are among the sickest and poorest persons covered by either program."
Speaking of the budget, the last-minute wrangling continues.
From the OC Register's Brian Joseph: "One newly introduced budget trailer bill would create a statewide authority to negotiate union agreements for In-Home Supportive Services workers. The IHSS program is managed at the county level, where collective bargaining agreements are currently negotiated."
"This new proposal, pushed by the Service Employees International Union andAmerican Federation of State, County and Municipal Employees, would take collective bargaining power away from the individual jurisdictions that actually run IHSS and give it to officials in Sacramento, the seat of union power."
"Watch for this bill to be controversial with some moderate Democrats."
Finally, from our "Who Says Twitter Isn't Useful?" file, comes word that those 140-character burst messages may be a useful tool to contact aliens who may have gotten in touch with us in 1977. Why are we not suprised?
"If there's something you'd like to say to aliens, now's your chance. The Wow! signal, a mysterious radio transmission detected in 1977 that may or may not have come from extraterrestrials, is finally getting a response from humanity. Anyone can contribute his or her two cents — or 140 characters, to be exact — to the cosmic reply via Twitter."
"All tweets composed between 8 p.m. EDT Friday (June 29) and 3 a.m. EDT Saturday (June 30) tagged with the hashtag #ChasingUFOs will be rolled into a single message, according to the National Geographic Channel, which is timing the Twitter event to coincide with the premiere of the channel's new series, "Chasing UFOs."
"Then on Aug. 15, exactly 35 years after the Wow! signal was detected, humanity's crowdsourced message will be beamed into space in the direction from which the perplexing signal originated."
Facebook works better, though...
