The Senate Local Government Committee on Monday approved legislation that
would require cities to first secure permission from an obscure appointed
state agency before they could file for bankruptcy.
That panel would have the authority to force cities and local districts,
including those providing water service and hospital care, to slash budgets
elsewhere before seeking bankruptcy protection.
"It's a bad idea," Jay Goldstone, the city of San Diego's
chief operating officer, said in an interview. "The state should
not be dictating whether a local government does or does not qualify for
bankruptcy. ... That's what the courts should be for."
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Coincidentally, Goldstone is one of the appointees to the California Debt
and Investment Advisory Commission, which would be granted the new oversight
power. The commission now provides local governments with advice and technical
assistance on debts and investments.
Bankruptcy is not a job for the commission, Goldstone said.
"This just adds another bureaucratic layer at a time when we probably
need less bureaucracy, not more," he said.