Stockton, California on the Brink of Bankruptcy

In recent years, many people that have been overwhelmed by the housing market crash or laid off as a result of the recession have filed for bankruptcy.  However, many large and well-known companies have gone through bankruptcy as well including Kodak, General Motors, Chrysler and the local Los Angeles Dodgers.  Now according to the New York Times, it appears likely that the City of Stockton, California may file for bankruptcy soon.  The New York Times reports

STOCKTON, Calif. — The signs of better times are easy to spot downtown: the picturesque marina on the San Joaquin Delta, the gleaming waterfront sports arena, and the handsome high-rise that was meant to house a new city hall. But those symbols are now bitter reminders of how bad things are here today: on Tuesday this city of almost 300,000 moved a step closer to becoming the nation’s largest city to declare bankruptcy.

During a contentious meeting that stretched late into the night, the City Council decided, nearly unanimously, to begin mediation with public employee unions and major bond creditors in what is widely seen as the city’s last-ditch attempt to restructure its finances outside of bankruptcy. Facing a budget deficit from $20 million to $38 million on a budget of roughly $165 million, the Council declared a fiscal emergency for the third year in a row.

“Right now we are a city that has frankly hit a wall,” Mayor Ann Johnston told the Council and hundreds of city residents who attended the meeting. “If the players don’t come together and agree to a fix, then we’re all in big trouble.”

You can read the rest of the story at the New York Times.