California’s Ongoing Efforts to Limit Municipal Bankruptcies
Since late January, California’s state assembly has considered¬†legislation designed to impose additional hurdles on cities, services districts, and other California municipalities that need to rehabilitate themselves under Chapter 9.
Supporters of California Assembly Bill 155 (AB 155)¬†– which requires California municipalities to to receive filing approval from a state panel prior to commencing a Chapter 9 proceeding – argue that the bill will preserve the credit-ratings of local municipalities and protect local taxpayers.¬† Opponents of the bill argue that it is merely an “end run” by public employees’ unions¬†around a process that permits municipalities to reject¬†union contracts and rehabilitate themselves.¬† Some additional background, and¬†a copy of the bill as introduced, is available on an earlier post on this blog.
On June 3, AB 155 took a step toward passage when it cleared the California State Assembly by a vote of 43-16, with no Republican support.¬† A copy of the bill, as amended, is available here.¬† Governor Schwarzenegger has reportedly not taken a position on the bill, according to an article in Thursday’s Sacramento Bee.
The bill now goes to the California State Senate.
Tags: "AB 155", "Assembly Bill 155", "California State Assembly", "Chapter 9", "credit rating", "Governer Schwarzenegger", "public employees unions", "rehabilitation", "rejection", "Republican", "Sacramento Bee", "union contracts", legislation, municipalities, taxpayers