Wednesday, June 27, 2012

Stockton Filing Bankruptcy is the Largest US City to Fail



Stockton has become the cities largest in the U.S. to seek bankruptcy protection. And it seems, the city doesn't know who is to blame. Well, let me shed some light. Overspending, unions, and illegal aliens are sucking the city dry. Wasteful programs and corruption has taken a very prominent city into the ghetto. In other words, George Bush is to blame. LOL.


(LATimes) STOCKTON — This Gold Rush-era port city, an epicenter of California's agricultural exports, will become the nation's largest city to seek protection under the U.S. bankruptcy code after its City Council on Tuesday stopped bond payments, slashed employee health and retirement benefits and adopted a day-to-day survival budget.

City Manager Bob Deis likened the process to cutting off an arm to save the body. He is expected to file bankruptcy papers immediately.

Most knew what the night held; bankruptcy has been a long time coming. Stockton has been in negotiations with its creditors since late March under AB 506, a new California law requiring mediation before a municipality can file for reorganization of debt. It was the first use of the law, and policy analysts who watched its torturous and tedious progress have titled their report on it "Death by a Thousand Meetings." Mediations ended Monday at midnight.

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.

The city made $90 million in drastic cuts from the general fund in the last three years, including reducing the police department by 25%, the fire department by 30%, and cutting pay and benefits to all employees. There is a state investigation into whether Stockton's financial devastation was entirely due to shortsighted optimism or if there was corruption. The state mediation law requires assigning blame.