CA chickens coming home to roost

July 23, 2012

Katy Grimes: A fourth California city is on the verge of bankruptcy. What a surprise. Yawn.

The news that Compton is about to file for federal bankruptcy protection is not surprising. But news that Santa Monica may also file, is.

Sadly, this is probably just the fourth in a long line of insolvent cities and municipalities preparing to file for bankruptcy.

Don’t say we didn’t warn you about the consequences of gross mismanagement, corruption, legacy building, criminal negligence, and incompetence of public officials.

While some in the media have been blaring the warning bells, most elected lawmakers have been practicing public denial and distancing themselves from culpability.

But heads will roll if pension checks bounce, or aren’t issued, or bond payments aren’t made.

Take Stockton… please.

Ed Mendel at Calpensions writes, “A Stockton bankruptcy proposal does not cut pensions, but the city wants to eliminate $197.5 million in pension bond payments over the next 25 years, a plan opposed by the bond insurer that would be stuck with the tab.

The bankruptcy proposal would end pension bond payments from the troubled city general fund, which pays for most programs and is deep in the red with a $26 million deficit that could balloon if employee lawsuits overturn emergency pay cuts.”

“Stockton issued $125 million worth of pension obligation bonds in 2007 to cover an ‘unfunded liability that was largely created by enhanced retirement benefits in the late 1990s and early 2000s,’” Mendel reported.

“The city proposal said $124 million remains to be paid. With interest, the city is scheduled to spend $239 million paying off the bonds by 2038, about 62.6 percent from the general fund and 17.4 percent from special funds.”

But the clincher is not just what Stockton pays now–“the annual city payment to the California Public Employees Retirement System, listed as $16.8 million, is expected to jump to $22.3 million next year and nearly double to $30.2 million in fiscal 2020-21.”

Read the entire story HERE — Mendel is the best when it comes to understanding pensions, and pension debt. As more California cities file for bankruptcy, it will be very interesting watching how they manage pension debt.

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  1. Donkey
    Donkey 24 July, 2012, 08:44

    The RAGWUS feeders just don’t get it Katy. We are just going to let the entire system fail if a mature adult refuses to take control of pay, benefits, perks, and pensions of the RAGWUS parasites. 😉

    Reply this comment
  2. Ulysses Uhaul
    Ulysses Uhaul 24 July, 2012, 08:45

    If this is not red meat for Poodle and Donkey and Bobbie SD what is-

    Reply this comment
  3. Donkey
    Donkey 24 July, 2012, 08:46

    “Take control and CUT the pay, benefits, perks, and pensions of the RAGWUS parasites.” I left the most important part out of my post!! 🙂

    Reply this comment
  4. Bruce
    Bruce 24 July, 2012, 09:58

    Fresno will be the next city to file, probably within a year – millions and millions of liabilities for pay, benefits, pensions, and debt service on years of failed city projects.

    Reply this comment
  5. Ulysses Uhaul
    Ulysses Uhaul 24 July, 2012, 11:04

    Real original post….a gem.

    Reply this comment
  6. Rex The Wonder Dog!
    Rex The Wonder Dog! 24 July, 2012, 12:25

    But heads will roll if pension checks bounce, or aren’t issued, or bond payments aren’t made.

    First- Prichard, AL

    Second- Central Falls, RI

    Third- CALTURDS BABY!!!!!!!!!!!!!!!!!!!!!!!!!! 🙂

    The sky fell…on Teddy!

    Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 24 July, 2012, 12:28

    Your repetitive…new material PLEASE!

    Reply this comment
  8. Rex The Wonder Dog!
    Rex The Wonder Dog! 24 July, 2012, 17:00

    !!!!11111111111111%%%% bAbY!

    Reply this comment
  9. Hondo
    Hondo 25 July, 2012, 09:27

    Obama’s speech that it is the government that is responsible for Bill Gates or Edison or Steve Jobs is countered by Kalifornia. If big government is the leading cause of great economic inventions, then Kalifornia should have a budget surplus. But just the opposite is true.
    The bigger the govt, the worse economic climate it creates. Which leads to these huge deficits.
    Actually JUST THE OPPOSITE IS TRUE. It is capitolistic profits that fund govt. Raising taxes on the welfare class brings in no more money. Taxing the job creaters out of the state brings in less money.
    And jacking up pay and pensions for unaccountable public employees brings these bankruptcies.
    LA is facing a billion dollar deficit after the election. They made short term deals with the unions to get them past the elections.
    So tell me, which city and county in Kali is not facing gigantic pension fund deficits? Very few.
    No pension check is safe when everything is bankrupt.

    Reply this comment

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