Tags: bankruptcy | california

City Bankruptcy Legislation Stalls in Sacramento

Wednesday, 08 Aug 2012 02:15 PM

By Alec Weisman


The California Senate tabled union-supported legislation that could have delayed city bankruptcies after vocal opposition from the mayors of the state’s 10 largest cities.
 
Democratic Senate President Pro Tem Darrell Steinberg announced Monday he was putting the bill on hold because he wanted to avoid “another debate on municipal bankruptcy,” according to the Los Angeles Times. He added the state legislature should be focused on pension reform instead.
 
The legislation was intended to help cities delay declaring bankruptcy after the state saw three municipal bankruptcies over the past six weeks.
 
However, the League of California Cities opposed the proposed legislation because of concerns the bill would make it tougher for municipalities to file for bankruptcy protection and delay the process indefinitely.
 
The California Labor Federation, California Professional Firefighters (CPF), California Nurses Association, and other public unions had appealed to State Assemblyman Bob Wiecowski, author of the bill, in response to the recent bankruptcy declarations.
 
A spokesman for the 30,000-member CPF said the legislation would have stopped cities from using: “Bankruptcy courts as a bailout for mismanagement or bad fiscal choices.”
 
Organized labor had managed to convince lawmakers in Sacramento to pass a new law last year that required California cities to engage in 60 days of mediation with city unions prior to declaring bankruptcy.
 


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