First, Detroit showed that that wasn't necessarily true. Nothing to see here, move right along, I was told. But now the proof of the lie has hit much closer to home--about 45 minutes away, to be precise:
A judge’s potentially groundbreaking ruling in the Stockton bankruptcy case should send messages loud and clear.Think it couldn't happen to the State of California? States and municipalities cannot override federal bankruptcy laws. The state constitution is no guarantee I'll get my pension if California goes broke. I hope the recent changes to STRS contributions (first link in this post) are enough to sustain the system.
To the Legislature – that it can’t rewrite federal bankruptcy law. To the city of Stockton, Franklin Templeton Investments and CalPERS – that they need to make a deal. And to local officials across California – that they need to get more serious about pension reform.
In his verbal ruling, Judge Christopher Klein declared Wednesday that public employee pensions are not off-limits in bankruptcies. He suggested that insolvent California cities could choose to reduce already-promised pension payments and even walk away from the California Public Employees’ Retirement System...
And the biggest losers are the working people of Stockton, who will be paying for these mistakes for years to come. About 2,400 retirees have lost their city-paid health insurance, while residents are getting slammed by $90 million in budget cuts and by higher sales taxes to shore up public safety.