Isn’t CalPERS usurping federal law?

“We lost 100 police officers in a very compressed time frame due to the cuts mentioned above. What do you think they will do if Stockton goes after their pensions next? California cities have rigorous standards for hiring police officers. It takes 100 applicants to fill one police officer position, where they are given a gun and huge discretion in our communities. Stockton has highly trained paramedics and water or wastewater treatment plant operators. Would you have concerns with your airplane pilot or surgeon if they were getting substandard compensation?

—Bob Deis, Stockton city manager 2010-13, in a Sacramento Bee guest editorial ($).

He’s still arguing that the city cannot impair CalPERS’ public employee pensions, and he’s probably still right. Certainly from the “service solvency” viewpoint he’s right; if Stockton cuts pensions police and other public employees will trample each other in the rush out the door.

Still, I await the ruling of Stockton’s bankruptcy judge with interest. I have my doubts about the city’s position, even though it comes from its expert BK attorney. As I laid out here, if the city cuts pensions, CalPERS supposedly immediately can demand $1.6 billion up front.

But isn’t that a de facto way of superseding federal bankruptcy law? A city that cannot afford $1.6 billion — or what ever cost CalPERS imposes — cannot go bankrupt. CalPERS, in other words, has found a way to rob cities of their rights under the bankruptcy code. I’ll wager that bothers the judge.

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    Michael Fitzgerald

    Mike Fitzgerald is The Record’s award-winning metro columnist. His column runs in the paper three times a week. Born in San Francisco, he was raised in Stockton. His column covers diverse beats including, sometimes, the offbeat. Read Full
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