Judge: Pensions can’t be cut, but pay can

by John Seiler | December 24, 2013 9:04 am

U.S. bankruptcy court[1]California still is a long way from resolving its pension crisis, in the courts and elsewhere. But here’s an important new development[2]:

“SAN JOSE — In a landmark ruling that could help shape city budgets around the state, a judge invalidated key parts of San Jose’s voter-approved pension cuts but upheld other elements that could still save huge taxpayer costs.

“Santa Clara County Superior Court Judge Patricia Lucas’ tentative decision released Monday prohibits the city from forcing current employees to contribute significantly more toward their pensions, as called for in last year’s Measure B. But the ruling allows the city to cut employees’ salaries to offset its increasing pension costs.”

However, unlike San Bernardino, San Jose isn’t in bankruptcy court. Judge Lucas is a California judge, who must follow California law on pensions — or at least the common current interpretation that the California Constitution prevents cuts to pensions.

As Detroit’s bankruptcy has shown[3], federal bankruptcy judges are under no such constraints.

  1. [Image]: http://calwatchdog.com/wp-content/uploads/2013/12/U.S.-bankruptcy-court.jpg
  2. new development: http://www.mercurynews.com/pensions/ci_24782960/pensions-city-workers-cant-be-cut-but-pay?source=rss
  3. has shown: http://www.nytimes.com/2013/12/04/us/detroit-bankruptcy-ruling.html?_r=0

Source URL: https://calwatchdog.com/2013/12/24/judge-pensions-cant-be-cut-but-pay-can/