“When you ask who’s going to tip over, it’s not ‘Who is providing the pension benefits?,’ it’s, ‘Who is providing the pension benefits in an economic environment that they can’t support it?’” says Milnes.
Reason Foundation senior analyst Adam Summers says that Stockton’s story is becoming an increasingly common one for cities across the U.S.
“There’s a real kind of moral hazard, whereby [city officials] have incentives to offer goodies to people, knowing that they won’t have to bear the costs of those decisions,” says Summers.
In Stockton, residents, taxpayers, and retirees are bearing the costs of short-sighted political decisions. Stockton’s general fund, meant to be for basic city services such as police and fire, has been gutted by the poor fiscal decisions, resulting in a 26-percent reduction in city police. Last year, a record 58 murders took place in Stockton. This year, they’ve already had 34.