Bankrupt Stockton Pins Hopes on Tax Increase, Not Pension Reform

It's not global warming that's going to sink this city underwater.Credit: calwest / Foter / CC BY-NC-NDStockton, Calif, leaders have confirmed their bankrupt city will go the route of Vallejo and will navigate its way out of bankruptcy without modifying its public pension program. Dan Walters discusses the situation in his column for the Sacramento Bee today:

Bob Deis, the city manager of insolvent Stockton, is proud of fashioning a bankruptcy plan that avoids cuts in city workers’ pensions.

Insurers of the city’s bonds had demanded that pensions be on the table but appear to have backed off and accepted a multipart deal that includes stretching out some payments and taking over a building that would have become Stockton’s City Hall.

Were pensions to be reduced, Deis says, “There’ll be a mass exodus of those employees, and we won’t be able to fill those positions.”

Yes, but what’s the down side, Bob? (Thank you and be sure to tip your server!) Stockton’s plan is very much dependent now on voters approving a 3/4-cent sales tax increase in November. One-third of the revenue from the tax increase would go into the general fund. The rest will go to public safety to restore cut public safety jobs.

City leaders and Stockton’s newspaper may be sold on this tax increase solution, but some residents have come out and said they don’t trust the city to spend the money on what they say they’ll spend the money on.

Walters also made note of how Vallejo’s bankruptcy reorganization has worked out for them after they failed to rein in pension obligations. For those who missed the Reuters piece last week: It didn’t. Pension costs are now consuming even more of their budget than it did after leaving the bankruptcy, taking up 18 percent of the city’s general fund, and Vallejo is seeing new deficits.

In March, Steven Greenhut noted Stockton’s plum deals for city workers and its reluctance to scale back benefits. Below, Reason.tv on Stockton’s bankruptcy:

And check out Reason's November issue for analyses of other failing cities like Detroit, San Bernardino, Calif, Harrisburg, Pa., Trenton, N.J., and Chicago.

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  • Auric Demonocles||

    If they want a guarantee that they would be first in line at bankruptcy, they should have asked for secured debt.

  • Paul.||

    To be fair, when I started going broke after my divorce, I initially pinned my hopes on some new infusion of cash from.... from a magical place that had yet to identify itself. It took me a few weeks to finally realize that I had to cut expenses.

    government budgets something something not like personal budgets.

  • Hugh Akston||

    Every problem is a revenue problem, Paul.

  • AlexInCT||

    They are obviously not taxing the serfs enough...

  • Fist of Etiquette||

    Were pensions to be reduced, Deis says, “There’ll be a mass exodus of those employees, and we won’t be able to fill those positions.”

    Bull. Shit. On both contentions.

  • Lord Humungus||

    Full speed ahead on the gravy train!

  • albo||

    Fueled by the blood of sucker taxpayers!

  • ||

    OT, but look at some response I got from Slate commentators when I pointed out that the Obama administration was engaging in shutdown theater in choosing what to close:

    ilovejersey 8 minutes ago
    I really don't understand people like you. I'm sure you're smart enough to realize what happened at the WWII memorial and Mount Vernon were not planned by the Administration as part of a PR strategy. The National Park Service had a responsibility to close most operations due to the shutdown, and low-level employees were simply implementing this. What happened at Mount Vernon was clearly a minor misunderstanding — a mistake made many, many tiers below the President.

    It's like the IRS thing, just one giant misunderstanding stemming from rogue low-level bureaucrats.

  • ||

    Willful ignorance is the best kind of ignorance.

  • Pro Libertate||

    Ve vere justk obeying urders!

  • Y||

    TOP MEN don't make mistakes.

  • Mainer2||

    — a mistake made many, many tiers below the President.

    It's not like he's in charge of the executive branch and could pick up the phone, call the head of the NPS, and say, hey, stop doing stupid shit that is creating needless cost and inconvenience.

  • Pro Libertate||

    That's what totally and utterly kills any argument that the fuhrer knows nothing. He fucking knows now, even if that were true, which it clearly isn't. What's being shutdown is coming straight out of the White House. Otherwise, why is so much of this public facing?

  • entropy||

    Ah, the Good Czar fallacy.

    If only the Czar knew what was going on surely he would put a stop to it.

  • Anonymous Coward||

    The King would never approve of such behavior! I'm sure the King doesn't even know about it! Once he becomes aware, he will surely correct it!

    Go ahead, little Blue-tards. Denial is just one step in the process.

  • Pro Libertate||

    It's interesting to watch a parasite that can communicate. I wonder if a parasitic virus operates the same way?

  • Auric Demonocles||

    Don't be stupid, viruses remove forehead ridges or turn you solid.

  • Pro Libertate||

    That's some dumb shit right there. It's not like they tried to explain away all of their other concessions to low budgets and even lower technology.

  • Auric Demonocles||

    If you're not careful, you'll get broke down into water vapor and white crystals.

  • Pro Libertate||

    At least weird space diseases are plausible when not used to explain away your make-up limitations from the 1960s.

  • Auric Demonocles||

    If they were going to go the "weird space disease introduced by humans" route, I don't know why it wasn't an STD from Kirk.

  • Pro Libertate||

    Who said it wasn't? Two ships visiting a starbase, Kirk does what Kirk does with one or more women on the other ship during leave, disease breaks out a few weeks later.

  • Auric Demonocles||

    So you're saying the augment storyline was a coverup?

  • Auric Demonocles||

    You're a Kirker!

  • Pro Libertate||

    Just think about what Kirk accomplished. He saved the entire universe at least once and defeated godlike aliens multiple times. It's a little surprising the Federation didn't rename itself the Kirkaration.

  • Auric Demonocles||

    You probably think Wolf 359 was an inside Kirk.

  • Pro Libertate||

    Kirk would've assimilated the Borg if they'd messed with him. Then they'd have submitted to his will.

  • Auric Demonocles||

    Oh come on. Look at how they dress. Getting the Borg to submit sexually is no achievement.

  • Pro Libertate||

    Okay, smartiepants, why did the Borg assimilate Jeri Ryan? Kirk, Q.E.D.

  • Auric Demonocles||

    The Borg strive to be perfect by assimilating people. That's their thing. With kind of a plan, of course they are going to assimilate Jeri Ryan.

  • Hillary's Clitdong||

    The taxes will increase until the economy improves.

  • AlexInCT||

    And then some more too!

  • Pro Libertate||

    Silly, tax increases will cause the economy to improve!

  • albo||

    But if they cut pensions, that would upset public employee unions, who would take it out on politicians by not helping their re-election campaigns.

    Therefore, that means that higher taxes and a bit of whistling and looking off into the air is the proper solution.

  • some guy||

    How's that definition of 'insanity' go again?

  • Paul.||

    Coming back to Hit & Run and expecting different jokes?

  • Auric Demonocles||

    Knock knock.

    Who's there?

    Fuck.

    Fuck who?

    Fuck you, (that's why)/(cut spending).

  • Anonymous Coward||

    Bob Deis, the city manager of insolvent Stockton, is proud of fashioning a bankruptcy plan that avoids cuts in city workers’ pensions.

    Insurers of the city’s bonds had demanded that pensions be on the table but appear to have backed off and accepted a multipart deal that includes stretching out some payments and taking over a building that would have become Stockton’s City Hall.

    Were pensions to be reduced, Deis says, “There’ll be a mass exodus of those employees, and we won’t be able to fill those positions.”


    Don't let the door hit you in the ass on the way out.

    Just name Nick Diaz Emergency Dictator of Stockton. Not like he could fuck the city up any worse that Bob Deis and his predecessors have.

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