San Diego Mayor Jerry Sanders has repeatedly dismissed bankruptcy as a foolish and futile solution to the city's financial agony. On January 31, the mayor submitted a strongly-worded opinion piece to the San Diego Union Tribune, calling the proposed bankruptcy solution a "myth" and "sham."

In recent months, business leaders and government officials have both cited bankruptcy as a possible solution for San Diego's ailing budget, fueled, for the most part, by its massive pension debt.

However, Sanders contends that filing for bankruptcy is not a viable solution to the pension problem and that, at best, would waste millions of dollars and valuable time. In a recent article, the Union Tribune took a look at this claim and found that it was mostly true ... but not completely.

Of all San Diego's debts, the $2.1 million pension bill is by far the largest thorn in the mayor's side.

Still, the California constitution makes pension benefits permanent. They can't be changed unless a municipality gives their employees comparable perks. San Diego's city charter protects pensions, too.

However, as the article points out, federal bankruptcy law is higher than state and city law. This means that, technically, a municipality like San Diego could attempt to decrease its obligations by filing for bankruptcy.

Still, would they even try?

In San Diego's case, it doesn't seem likely. After all, filing for bankruptcy in order to decrease pension obligations would throw San Diego up against the labor unions and, as many have said, such a case would likely end up before the United States Supreme Court. From there, it could turn into a question of whether the government impeded the state's right to make decisions.

Mayor Sanders fears that a Supreme Court decision would not fall on the side of bankruptcy. Additionally, the cost of filing for bankruptcy and trying a case before the Supreme Court could run into the hundreds of millions and that's money the city could use now to solve the problems facing it.

So, while bankruptcy seems an option for San Diego, it doesn't seem all that likely. Regardless, it's certain that drastic measures will be taken somewhere along the way - it's just a question of where and when.

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