BREAKING: Large California city heads to bankruptcy court
By outward appearances, Stockton, a city of nearly 300,000 on the Sacramento-San Joaquin River Delta, seemed in the mid-2000s to be emerging from decades of struggle.
But then the recession hit, and the good times went bust. On Monday, California’s 13th-largest city begins federal court proceedings that could end with it becoming the most populous city in the U.S. to successfully enter bankruptcy, a move opposed by those who lent the money to keep it flush.
On its journey to this point, the Central Valley city has become emblematic of both government excess and the financial calamity that resulted when the nation’s housing bubble burst. Its salaries, benefits and borrowing were based on anticipated long-term developer fees and increasing property tax revenue. But those were lost in a flurry of foreclosures.