SACRAMENTO — California's public-employee unions scored a key legal victory this month that will make it far more difficult for local and state agencies to rein in the growing debts to cover medical-care promises made to their employees. Such costs are even more ominous than unfunded liabilities for pensions, according to state Treasurer Bill Lockyer. Los Angeles County Superior Court Judge Luis Lavin ruled on Sept. 13 that the city of Los Angeles may not freeze health-care benefits for some employees. Facing a fiscal emergency, the city told its attorneys, engineers and architects they could receive a capped health-care subsidy or contribute 4 percent of their salary to cover the benefit, according to news reports. The groups' unions took the matter to court. The resulting ruling is a setback for statewide efforts to rein in public-employee costs, and is the expected consequence of a 2011 state Supreme Court ruling that can place non-vested health-care benefits on the same footing as vested pension benefits.
One judge making a rule has now increased substantially the bankruptcy risk for all the municipalities in California. Another ruling onthe matter is coming from San Jose. It seems labor contracts for California cities are now in the hands of judges, but isn't that the bankruptcy process?. Does it matter if the city waits for bankruptcy, then goes to court? Same process, the name is bankrupcy.
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