Elected officials in Harrisburg and other financially troubled cities are paying attention to California. They aren’t planning a vacation; they are interpreting a judge’s ruling this week allowing the city of Stockton to proceed with bankruptcy to address its desperate financial condition.

Officials in Detroit and even smaller cities burdened by dwindling tax revenue and burdensome debt and pension obligations will also watch Stockton.

Stockton, a city of nearly 300,000, let rapid real estate growth fuel unsustainable city spending — until the housing bubble burst in the financial crisis of 2008. Since the real estate and financial crises, Stockton officials slashed millions of dollars from spending on services, laying off a quarter of the police force, some firefighters and cut funding for senior centers.

While making those painful cuts, the city still made payments to the pension funds for employees. It wanted to renegotiate its debt, but bondholders, represented by big banks, refused.

A federal judge ruled Monday that Stockton was acting responsibly in trying to renegotiate its debt, a ruling that rejected legal challenges by Wall Street banks. The banks wanted Stockton to cut its massive pension obligations before any debt-reduction action was considered.

Stockton, the largest municipal bankruptcy so far, had been paying $29 million a year to CalPERS, the California State Employees Retirement System.

In his ruling, the judge criticized Stockton’s leaders for assuming the real estate boom would continue and betting on a big redevelopment project while also promising generous employee benefits and agreeing to too many years of “above-market compensation for public employees.”

Harrisburg is in trouble partly because of a mismanaged upgrade of a municipal incinerator, but it also has some of the same problems as Stockton.

One bankruptcy lawyer, commenting on the judge’s ruling, said, “No one wants to talk about it. But if CalPERS can be forced to take a haircut in Stockton, then what’s to stop another city from saying, ‘Gee, we’ll file for bankruptcy and cut in half our $10 million pension contribution?’ ”

There is a fear, in the worlds of both public employee pension funds and municipal bond financing, that there could be a domino effect, with more cities following Stockton down the bankruptcy path. Those cities, like Harrisburg, might have little choice.

Wall Street bankers argue that for Stockton to make ongoing payments to CalPERS while expecting renegotiated debt is unfair.

The best solution is for everyone to feel the pain, or take a haircut, as they say in financial circles. It’s possible that the judge’s ruling clearing the way for bankruptcy and allowing renegotiated contracts, restructured debt and lower pension payments might get all players to the table for serious discussions. Agreeing to a negotiated workout plan might be better than a court-ordered restructuring plan over which they have no control.

No one should escape financial pain in a recovery plan for Stockton or Harrisburg or any other troubled municipality. Cities, as well as states, must make changes to become financially sustainable — and that probably means a combination of lower payrolls and less-generous pay and benefits, as well as higher taxes.

Elected officials in many cities and states have mismanaged their budgets and overpromised workers on health care and pension benefits.

Reality is setting in — and everyone, including employees, taxpayers, banks and pension beneficiaries, should take a hit.