Dems, unions pushing new local government bankruptcy bill

By Dan Walters, The Sacramento Bee

Although a new law to govern bankruptcy filings by local governments is just four months old, Democratic legislators and labor unions are lining up behind a major revision that local officials say would tilt the playing field.

In the aftermath of Vallejo’s bankruptcy, unions had pushed legislation that would require local governments to get permission from a union-friendly state commission before filing bankruptcy.

The issue was stalemated for several years, but in 2010, the Legislature passed a delicately negotiated compromise that would essentially require a locality contemplating bankruptcy to first go through a “neutral evaluation process” and seek relief from creditors before taking that step, unless it declared a fiscal emergency.

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