Bob Deis, the city manager of insolvent Stockton, is proud of fashioning a bankruptcy plan that avoids cuts in city workers’ pensions.Were pensions to be reduced, Deis says, “There’ll be a mass exodus of those employees, and we won’t be able to fill those positions.”
Vallejo decided to cut several expenses in bankruptcy, but, out of fear of legal tussles with the quarter-trillion-dollar California Public Employees’ Retirement System (Calpers), it left its pension obligations in tact. Now, with Calpers raising its contribution rates, pension payments are eating up more and more of Vallejo’s general fund.The city’s desire to keep its employees in Stockton is understandable, as is the need to let future public workers know that, come hell or high water, the city’s pension promises are safe. But if they’re not, in fact, safe, it’s not clear to us how it does anyone any good to pretend that they are and just hope the problem goes away. Stockton is putting its post-bankruptcy future at risk—all to avoid reckoning with a growing problem that they should have faced up to years ago.One last hope for salvation comes at the very end of the SacBee’s report:
Voters may weigh in next year on a proposed state ballot measure that would allow local governments to cut future pension benefits they cannot afford.
One can only hope.[Image courtesy of Shutterstock.com]