My article in today's City Journal California looks at the Stockton bankruptcy -- the city decided to pursue Chapter 9 after completing the 90-day negotiation process mandated by a new state law -- and addresses the argument made by union defenders who believe the city simply is a victim of the foreclosure crisis. The mortgage meltdown hit the Central Valley port city particularly hard thanks to its location not far from the costly, growth-controlled Bay Area (when prices went up, builders couldn't build many new houses, so wannabe home buyers headed east into the farmlands). But the city is in trouble because of excessive public-employee compensation packages and crazy spending on redevelopment projects. Fortunately, the state has shut down redevelopment but it has yet to address the pension and retiree health-care issues.
TrackBack URL: http://www.publicsectorinc.com/cgi-bin/mt/mt-tb.cgi/934
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