Stockton, CA Declares Bankruptcy

Stockton, California is now the largest U.S. city to declare bankruptcy.  We have been saying for some time now the the state of California and its run away debt is a foreshadowing for what will be coming for the rest of us.

(CBS/AP) STOCKTON, Calif. - Officials in Stockton said Tuesday that mediation with creditors has failed, meaning the Central California city is set to become the largest American city ever to declare bankruptcy.

The river port city of 290,000 in Central California has seen its property taxes and other revenues decline, while expensive investments and generous retiree benefits drained city coffers.

In the past three years, officials in the city that was slammed by the collapse of the housing market dealt with $90 million in deficits through a series of drastic cuts.

They eliminated one-fourth of the city's police officers, one-third of the fire staff, and 40 percent of all other employees. They also cut wages and medical benefits.

"For me, bankruptcy might as well be a life sentence," said Gary Jones, a retiree who used to be a police officer in Stockton and said he was diagnosed with a brain tumor.

Other residents complained about plummeting property values, and recurring break-ins and robberies.

"The average citizen will not put up with this. Their home prices have plummeted, they have no jobs, a lot of people are getting fed up so that they have to resort to crime." said Gregory Pitsch, a 22-year-old unemployed resident who made an unsuccessful run for mayor. "I'm asking you to make the right decision, not destroy the property values in this city, which bankruptcy will do."

But city officials say Stockton has run out of options. In recent years, thousands of new homes mushroomed in Stockton, part of a suburban housing boom that attracted buyers from the San Francisco Bay area and beyond.

When the economy crashed and the construction bubble burst, Stockton was battered by foreclosures and lost income from property taxes and other fees.

Here;  http://www.cbsnews.com/8301-201_162-57461273/stockton-calif-to-become-largest-city-to-declare-bankruptcy/

Yep...out of options...lay off the police officers...crime rises and property values collapse.

Sounds about right.