Professor Michelle Wilde Anderson describes the impact Stockton’s bankruptcy plan could have across California if it were to be rejected in this Los Angeles Times article by Marc Lifsher and Melody Petersen.

In a closely watched case, a federal judge on Thursday is expected to decide whether the bankrupt city of Stockton can continue to pay employees generous pensions that soon could consume one-fifth of municipal revenues.

The ruling has been much anticipated since U.S. Bankruptcy Judge Christopher M. Klein recently said that California’s rich and powerful public pension system should be treated like all other creditors — with no special protection.

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In contrast, a decision by Klein to reject Stockton’s plan — opening the door for the city to slash retirement checks — “would create shock waves throughout California” and to a lesser degree across the country, said Michelle Wilde Anderson, a Stanford Law School professor who specializes in local government and finance.

“It would have immediate implications,” she said. “First and foremost, Stockton retirees would see pension benefits reduced.”