Stockton goes bankrupt - Welcome to Greece West

BANKRUPT  -  Public employee unions in the People's Republic are trying to make municipal bankruptcy almost impossible

• With a flood of corrupt union campaign money, it is government of, by and for labor unions.
• Corrupt businessmen join in on the fun.  They have raked in millions in city building contracts.
• Everyone was looting the Treasury and the taxpayers are left holding the bag.

Greece USA  -  American politicians at every level can't stop spending other people's money to buy votes for the next election.  Free pretend Monopoly money for everyone!

Back in the mid-2000s, the city of Stockton, California was hopping. The housing market was strong, and as a result tax revenues were flowing in. The city took out $190 million in bonds and loans to pay for a bunch of civic projects including a new city hall, a new multipurpose arena, and a baseball park.

But then the recession came, the housing bubble burst and, observers say, Stockton was hit even harder than most other California cities by the economic downturn. The city now has an unemployment rate of nearly 20 percent, and the foreclosure rate is one of the highest in the nation. It was ranked by Forbes magazine as America’s “Worst Place to Live” two of the last three years reports the Daily Beast.

Stockton had become a bedroom community for commuters to San Francisco and Oakland, and that drove overbuilding. When the economy imploded, commuters started disappearing, and the city saw a flight of home buyers. Property values in Stockton then plummeted, perhaps more than anywhere else in the state and nation, and the city could no longer sustain itself or pay the generous pensions to city workers.”

The city already has slashed the police force by one fourth and the fire department by one third, and cut 40 percent of other city employees, along with wages and medical benefits. Kathy Miller, a member of Stockton’s city council and its vice mayor, tells The Daily Beast that the city had no choice.

Miller says the problems in Stockton began with a series of decisions made in the 1990s based on the fact that, at the time, the city was doing well.

“It all started with the state, which in the early ’90s changed the formulas in Calpers (California’s public employee retirement system),” says Miller. “The state legislature decided that public employees could retire earlier and with higher pensions, and they gave huge benefits to the California Highway Patrol (CHP).”



After that, Miller says, the city couldn’t find any qualified police to hire because they all wanted to go to CHP. “So we decided to offer the same benefits that the state had given to CHP retirees,” she says. “That benefit was eventually granted to firefighters as well, and then every bargaining unit asked the city for more. This same type of thing happened in San Diego, San Jose, and cities all over the state.”

“There are at least 10 other cities in this state that are half a step behind Stockton. They’re all watching us very carefully.”

Miller says the city council responded as quickly as possible when the economy went south, “but with public employees, we were locked into labor agreements. We worked very hard in 2010, but some of the representatives (of the public employee unions) refused to negotiate, and some even demanded huge raises in salaries and benefits. That same year, we declared our first fiscal emergency.”

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The clincher, Miller suggests, is when the city agreed in the 1990s to grant a lifetime retirement medical benefit to all city employees: “This benefit provided retired employees and one dependent with medical coverage with no premium, no co-pay, and no deductible. The worst part of whole thing is that the city didn’t set aside the money to fund the medical benefit.”

Miller says the council made the decision this week to eliminate the medical benefit which “is a luxurious benefit that a small group receives and which less than half of the cities in California provide. Nobody is being kicked off the city medical plan, but they will have to start paying for it. Taxpayers who live here will never have that benefit, but they are paying for it.”
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(The Daily Beast)

The city of Stockton invested heavily in subsidizing waterfront development. This week, it approaches bankruptcy.