Economies of scale for Bankrupt California

Stockton … Hercules … Lincoln … Milpitas. The list of cities has grown to four in the span of one week. These are all cities in California recently threatened with budgetary insolvency — where expenses exceed revenues. All have started to explore filing bankruptcy or drastically reducing their budgets and effectively doing the same, as would happen in a bankruptcy court.

AB 506, by Assemblyman Bob Wieckowski, D-Fremont, became law in 2011 to prevent or delay just such a run of bankruptcy filings. The California Legislature does not want a run of cities filing bankruptcy because the state budget continues to run a $20 billion annual deficit and is unable to bail out insolvent cities Cal Watch