By Steve Large

STOCKTON (CBS13) — A judge’s Detroit ruling has put untouchable pension payments in the bankrupt city of Stockton back in play.

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The ruling says Detroit can cut pension payments to dig its way out of its bankruptcy debt.

Stockton City Councilwoman Kathy Miller says the city never tried cutting its police, fire and other public employee pensions, because the legal fight would be too risky.

“We had reached out to representatives from [the California Public Employees’ Retirement System], they made it very clear that they would battle us legally,” she said, “and that’s a very expensive battle.”

CalPERS, which managers more than 90 percent of California cities’ employee pension plans is a financial giant, and will not give up its position easily, with investments valued at $270 billion.

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It released a response to the bankruptcy case, reading in part, “The ruling is short-sighted.”

But California pension reform advocates say Detroit’s case will open the door to rolling back California pension obligations eventually.

“A federal bankruptcy judge said yeah they can be cut, they’re just a creditor like any other creditor. And thats the key point,” said political columnist Steve Greenhut.

“The fact is we still have cities that can’t afford to pay their pensions for what they promised workers,” said Marcia Fritz with the California Foundation for Fiscal Responsibility.

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