SACRAMENTO, Calif. (AP) — U.S. bankruptcy law allows the California city of Stockton to cut pension benefits because it can treat its obligations to the public retirement fund like other debts, a federal judge said in a ruling that could help clarify who gets paid first by financially strapped cities around the nation — pension funds or creditors.

Stockton argued that it must make its pension contributions for public employees before its creditors are paid the entire amount they are owned.