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According to the Wall Street Journal today (May 28), some California legislators are pushing a bill that would make it difficult for a municipality to file for Chapter 9 bankruptcy. Under the proposal, any political jurisdiction that wanted to file bankruptcy would have to get approval from a state commission. The state's massive $21 billion deficit may be one reason for this proposed legislation. The state is now planning to pick cities' pockets. However, it's believed the bill was spurred by last year's bankruptcy filing of Vallejo, north of San Francisco. The city went into bankruptcy because of what it called highly excessive pay for police and firefighters. The California Professional Firefighters union then began to push for a bill to curtail municipal bankruptcy, claiming cities would use the process as a negotiating tactic. Opponents of the measure say it would be impractical; the city or county going into bankruptcy needs money fast to meet payroll. A politics-dominated commission could delay the process.
According to the Wall Street Journal today (May 28), some California legislators are pushing a bill that would make it difficult for a municipality to file for Chapter 9 bankruptcy. Under the proposal, any political jurisdiction that wanted to file bankruptcy would have to get approval from a state commission. The state's massive $21 billion deficit may be one reason for this proposed legislation. The state is now planning to pick cities' pockets. However, it's believed the bill was spurred by last year's bankruptcy filing of Vallejo, north of San Francisco. The city went into bankruptcy because of what it called highly excessive pay for police and firefighters. The California Professional Firefighters union then began to push for a bill to curtail municipal bankruptcy, claiming cities would use the process as a negotiating tactic. Opponents of the measure say it would be impractical; the city or county going into bankruptcy needs money fast to meet payroll. A politics-dominated commission could delay the process.