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Pension Funds California Cities

| Blog | September 24, 2013


pension fundsPension Funds and Bankruptcy

Many of California cities try to cope with pension funds and healthcare costs.

Pension fund losses during the recession still must be shored up, while funds continues to grow. Even with the pension reforms being enacted many cities remain concerned worry that the reform along with tax increases may not sove the problem.

One of the toughest problems facing cities is rising pension funds costs. California recently approved a $260 billion pension funds increase for public employees by raising contribution rates up to 50% in order to fund its obligations in 30 years. Cities must shift more of the cost for pensions to public employees in order to maintain services.

Stockton filed for bankruptcy and scrapped its retiree health program. Some cities like San Jose have approved ballot measures to reform pensions, but they are being challenged by lawsuits any may not hold up.

Cities are using tax increases
Voters approved 48 city general tax measures in 2012.

Outsourcing is another way cities can lower costs
Private companies can provide many services at less cost than public agencies.

Cities File for bankruptcy
Some cities like Stockton and San Bernardino have file for bankruptcy in order to survive. A judge last week ruled that the city of San Bernardino is eligible for bankruptcy, setting the stage for a historic decision of public employee pensions.

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Ruling Clears a Path for California City’s Bankruptcy
Judge Says San Bernardino Is Eligible for Chapter 9 Protection

Who Took Down Stockton? Published on May 20, 2013

“Who Took Down Stockton?,” examines how Stockton, California, became the largest city in American history to file for bankruptcy. The piece highlights the key characters and decisions that brought the city to the brink and traces the trail all the way back to Wall Street.

Marcia Fritz speaks about public employee pensions
at the SLO Chamber’s State of the State event

Marcia Fritz, president of the California Foundation for Fiscal
Responsibility, speaks about public employee pensions during the San
Luis Obispo Chamber of Commerce’s second annual State of the State
event on Friday March 8, 2013. – Published on Mar 20, 2013

San Bernardino, Calif. declares bankruptcy
San Bernardino is the third California city to declare bankruptcy in the past three weeks. Ben Tracy reports on the latest city to fall victim to the glacial pace of the economic recovery. – Published on Jul 11, 2012

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