CA Lawmakers Move to Shut Down Municipal Bankruptcies

California lawmakers are moving to deny the ability of cities and municipalities to file for bankruptcy, which would otherwise cleanse them of the bloated union contracts that have moved them deep into the red over the past decade.

"A bill that clamps down on municipal bankruptcy filings is headed for Gov. Schwarzenegger's desk, which is bad news for Los Angeles and other cash-strapped California cities.

It the governor signs Assembly Bill 155, it would place a hurdle in the path of filing for Chapter 9 municipal bankruptcy. The bill stipulates that a city may only file for bankruptcy with the approval of the California Debt Investment Advisory Commission, which provides information on debt to public agencies."

Of course, lawmakers are attempting to mischaracterize their efforts as simply an attempt to protect the public!

"California's taxpayers who rely on public safety, senior, park and library services, as well as those who own and operate businesses in our communities, deserve every effort that state and local government can make to avoid the long-term devastation of bankruptcy," the bill says.

Bankruptcy is simply a means to reorganize and eliminate burdensome liabilities. As a result, any city that files for bankruptcy could and would be able to continue fulfilling the same day-to-day activities that they were doing prior to the filing.

This latest action by legislators is simply an undisguised effort by California public unions to prevent their bloated, overly-generous retirement benefits from being scaled back in bankruptcy. Considering they were never fairly approved by the California public anyway, the effort to scale them back is reasonable on many fronts.

CA Budget Mess a Harbinger of Future Federal Issues

The massive budget deficit that the state of California currently faces should seemingly be an opportunity for lawmakers in the Golden State to finally face up to the fact that, at some point, chronic overspending needs to be reigned in.

Unfortunately, that's not the way things work in the world that politicians live in.

Consider Democratic lawmakers proposal to "solve" the state's $19 billion budget deficit, which counters the budget cuts that Governor Schwarzenegger had proposed.

"Assembly Democrats weighed in Tuesday with their own state budget plan that relies on borrowing nearly $9 billion from Wall Street and installing a new tax on oil production to pay back that loan over 20 years."

The $9 billion loan from "Wall Street" is basically securitized by the nickels and dimes that roll in over the next 20 years from the state's bottle recycling tax.

And I wonder how much additional tax revenue that new tax on oil production will actually bring in, once producers factor in the new cost into their estimates and decide that, "hey, maybe we should tap those oil rights we have in Texas or Oklahoma instead of bringing anything new on-line in California."

This sort of fiscal recklessness is foreboding for what Democrats in national office will do when it ultimately becomes clear that printing money is not the panacea for exploding budget deficits.

One can only imagine that instead of ultimately trimming costs as they by all rights should do, perhaps Congress will ultimately decide to securitize future gate receipts at the Smithsonian or sell burial plots at the Arlington National Cemetery.

We're a long ways away from lawmakers and their supporters in this country actually facing up to the destructive fiscal policies that they embrace.

CA Public Employees Get Set to Square off with CA Taxpayers

In what's likely to result in a nasty fiscal skirmish between California public employees and over-taxed California taxpayers, the California state controller's has pointed out that the sweetheart retirement benefits promised to state workers are currently being underfunded.

Controller John Chiang's office issued a report Tuesday showing the growing divide between what the state owes retirees for health and dental benefits and what it has saved so far.

The gap has grown to nearly $52 billion, about $3.6 billion over last year's estimate.

While promising outsized retirement benefits to state workers might have previously seemed like the politically expedient thing to do, it's clear now that such generosity is no longer feasible or possible.

The best course of action for state lawmakers to take, perhaps with a little urging from California taxpayers that, you know, actually care about whether their private property is stolen for the benefit of other people, is to drastically reduce the retirement benefits offered to California retirees.

In an era when it's the rare worker who receives a defined benefit pension from a private company, it's time for state workers to realize that the public can't afford the same for them.