"California Supreme Court curbs a pension benefit but preserves ‘California Rule’"

This is both a big deal and a half-measure.
The narrow ruling in this case is a step in the right direction but as was noted in last week's "San Francisco: 'Warren Buffett discusses ‘disaster’ contributing to Bay Area exodus in CNBC interview'" the fact that pensions are treated differently from other creditors will eventually result in no one lending to municipalities.

The politicians promised other peoples money to get their power and now the other people don't want to pony up.
From the Los Angeles Times, March 4:

The California Supreme Court made it clear Monday that state and local governments may reduce pension costs by repealing certain benefits without running afoul of constitutional protections for public pensions.

In a unanimous decision written by Chief Justice Tani-Cantil Sakauye, the court upheld California’s 2012 repeal of an “air time” benefit that allowed state workers to buy credits toward retirement service.

The decision was the court’s first in a series of pending pension disputes it has agreed to review.

Some legal analysts said the ruling suggested the court would strive to rule narrowly in future pension cases. Others contended the justices eventually would have to address how far state and local governments may go in reducing pension liabilities.

Public employers want the court to make it easier to cut pensions for current employees to tackle hundreds of billions of dollars in pension shortfalls.

Labor unions are fighting cutbacks, pointing to decades of court precedent that says California’s public pensions are contracts protected by the state Constitution.

In ruling for the state Monday, the high court distinguished core pension benefits from the retirement credits at issue.

Pensions are a form of deferred compensation protected by contract law, but the opportunity to buy retirement credits was simply an optional benefit, the court said.

It likened the option to the opportunity to choose from various healthcare plans, to purchase disability insurance coverage or create a flexible spending account to pay for health and child care costs with pre-tax dollars....MORE

Muni bonds are also a contract and if the money's not there to pay the creditors it's  not there.

But the same is going to have to be true for everyone or the system collapses.