Bankrupt Cities

Employee Compensation Pushes More CA Cities Toward Bankruptcy

Those generous pensions won't be so generous after bankruptcy court


“Are your cities going to make it for five years?” asked Little Hoover Commission Chairman Daniel Hancock at the recent commission hearing on pension and infrastructure financing.

“That’s a good question,” responded Dwight Stenbakken, deputy executive director of the League of California Cities.

California’s cities are being eaten alive by employee compensation costs. The pension reform measure signed into law in September by Gov. Jerry Brown, AB 340 by Assemblyman Warren Furutani, pretty much left current employees alone, focusing instead on new hires. Government officials will have to wait until 2018 to negotiate with public employee unions to reform pensions for current employees.