Not today, not under current federal law. But Calitics alerts me to a really disturbing story that I didn’t know about: Congressional Republicans are pushing legislation that would allow (and actually encourage) state bankruptcies. The idea, of course, is to break public-employee unions and wipe out pensions that people have paid into and earned.
Oh, and by the way: The bill would almost certainly make it harder for states to borrow money for infrastructure projects. The cost of bonds would go up, California would have less money to build new schools, roads, high-speed rail etc. Again, something the Republicans like.
It’s crazy: California is such a wealthy state, and should be nowhere near bankruptcy. I heard on the radio the other day that Jerry Brown is going to have to do now what he should have done in 1978: Make Californians feel the affects of Prop. 13. Back then, after warning that the tax-cutting measure would have calamitous results, he used state money to bail out local governments and prevent the impacts from being felt. Now, when there’s no state money left, local governments are going to get hit really hard. The disaster that Prop. 13 opponents warned about 32 years ago is finally going to hit.
At the very least, if that’s Brown’s approach, he’s going to have to work to allow local governments more freedom to raise revenue on their own. Unless he wants cities and counties (which by law CAN go bankrupt) to follow that route. And I don’t think he does.