Union bill would block city bankruptcies

MAY 25, 2010


A union-backed Assembly bill, authored by Assemblyman Tony Mendoza, D-Artesia, would potentially prevent financially destitute California cities from filing for federal bankruptcy protection under Chapter 9 of the bankruptcy code.

Mendoza’s bill would give the California Debt and Investment Advisory Commission, a state agency, the ability to deny any municipal bankruptcy filing, instead of allowing the city (or municipality) in question to make the decision. Intruding further into local politics, the commission could make the city keep all labor contracts in tact, as a condition of a bankruptcy filing, virtually nullifying the need for bankruptcy.

AB155 was heard in the Senate Committee on Appropriations Monday, but the committee referred AB155 to its suspense file.

AB155 was approved by the Senate Local Government Committee last month, but local governments and local government groups strongly oppose the measure. Opposition to the bill is not only fiscal in nature, it appears to be centered on the state deferring to unelected, union represented state employees to make decisions for California’s cities. This blatant conflict of interest appears not to matter to union-backed Democrats in the Legislature.

As telling as the bill’s union backers, so are the opponents of the bill, including the cities of Napa, San Bernardino, Sacramento, San Diego, Long Beach, West Hollywood, San Jose, Mammoth, Lake Forest, Berkeley, Salinas, as well as many of the state’s counties including Monterey and Riverside counties. Each of the cities and counties represented at the committee hearing expressed vehement opposition to the overreaching control by the state.

The California Chamber of Commerce and the Howard Jarvis Taxpayers Association (HJTA) were present in opposition as well, as was the Urban Counties Caucus, the State Association of Counties, the Regional Council of Rural Counties and the League of California Cities.

HJTA’s President, Jon Coupal recently expressed taxpayer opposition to AB155: “Bargaining with yourself works out well, right up until the point when the private sector can no longer afford these extravagant demands. Then your government benefactors become your enemies.”

Ballotpedia lists AB155 author Mendoza’s contributors as the California State Council of Service Employees, California Teachers Association, California State Council of Laborers, the California Association of Realtors, and the Southwestern Regional Council of Carpenters.

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