Wed June 27, 2012
City Of Stockton's Looming Bankruptcy: Pictures Tell The Story
Originally published on Wed June 27, 2012 9:19 am
Stockton, Calif., is on the verge of becoming the largest city in the nation to declare bankruptcy after its city council voted 6-1 Tuesday night to approve a spending plan that's essentially "a day-to-day survival budget," as the Los Angeles Times puts it.
A bankruptcy filing could happen as soon as today, according to our colleagues at KQED and other local news outlets.
The city of 300,000's painful step follows last year's bankruptcy filing by Alabama's Jefferson County — the largest municipal bankruptcy in U.S. history. That county piled up more than $4 billion in debt involving a failed sewer construction deal.
Stockton, as The Associated Press notes, has a $26 million budget shortfall. James Spiotto, a Chicago bankruptcy attorney who tracks municipal bankruptcies, tells the AP that until now the largest city to have declared bankruptcy was Bridgeport, Conn., (population about 144,000) in 1991.
The Times writes that "how Stockton found itself so mired in debt can be seen everywhere in the city's core. There is a sparkling marina, high-rise hotel and promenade financed by credit in the mid-2000s, mere blocks from where mothers won't let their children play in the yard because of violence."