Stockton retirees will likely bear the brunt, and the deepest cuts, of any of the stakeholders in the city’s impending bankruptcy. By July 2013, their benefits will disappear entirely.

While the final hammer won’t fall until the 2014 fiscal year, the pendency budget that was approved on Tuesday immediately reduces benefits for all retirees, and cancels healthcare coverage for retirees who served the city for less than ten years. Currently, about half of the city’s 2,400 retirees received health benefits as part of their retirement package. Their pensions will likely remain untouched.

The city’s pendency plan was designed to protect the city and its residents from experiencing any deeper cuts to programs and services. However, the pervious years cuts have left the city and its public safety sector understaffed and overworked. Many people are turning to neighborhood watch groups and other citizens organizations to provide the services people once expected from the city.

From the Associated Press:

When Stockton becomes the largest U.S. city ever to file for bankruptcy, it will strike a hard blow to residents, especially city employees and retirees whose health benefits and pensions helped drive the city toward insolvency.

City Manager Bob Deis said late Tuesday that officials were left with little choice but to recommend bankruptcy after failing to hammer out deals with creditors to ease the city’s $26 million budget shortfall.

Read the full article here.