Lockyer Rejects State Bankruptcy for California

On behalf of Macdonald Fernandez LLP on Wednesday, February 2, 2011.

We previously posted a short article on a Republican proposal to allow states to file bankruptcy. Bill Lockyer, California's state treasurer, has rejected the idea, arguing that bankruptcy is for individuals, companies and municipalities that cannot raise their revenue, whereas states are entitled to raise taxes. Sacramento Bee columnist Dan Walters has commented that California's $20 billion deficit is only 1% of its economic output. - Reno Fernandez