Wednesday, June 27, 2012

Stockton Goes Bankrupt

Negotiations with creditors fail. The city is paying now for underfunded, overly generous public employee retirement plans. 
The new budget did not call for additional service cuts beyond those that earlier slashed the police force by one-fourth, the fire department by one-third and 40 percent of other city employees, along with wages and medical benefits.

The budget approved Tuesday night would suspend payments for debts and legal claims; reduce payments for retiree medical benefits; further cut some pay and benefits; and increase revenue through code enforcement and parking citations.

In standing room only chambers, former city employees told council members about their life-threatening medical conditions and said benefit cuts meant they would effectively lose their health insurance.

"For me, bankruptcy might as well be a life sentence," said Gary Jones, a retiree who used to be a police officer in Stockton and said he was diagnosed with a brain tumor.


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