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July 11, 2012

It’s a trend: San Bernardino the third California city to seek bankruptcy

  • $46 million budget shortfall puts city in a tough spot source

» And they have company, too: San Bernardino, population 202,000, is not a small city. Nor is Stockton, population 291,000, which announced its intention to declare bankruptcy last month. Both fell on hard times after a boom-and-bust period. The much-smaller Mammoth Lakes also filed for bankruptcy protection recently, but unlike the recession-related reasons for the other two cities, their reason was lawsuit-related. (That city owes $43 million in a breach-of-contract lawsuit to a developer, which is far more than their yearly operating budget.) Anyone want to take bets on which California city falls prey to bankruptcy protection next, if any? (Edit: Spelling)

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12:10 // 1 year ago
June 27, 2012

Meet Stockton, Calif.: The country’s biggest bankrupt city

  • $90 million the amount Stockton has had to drastically cut from its budget in the past three years, in an effort to remain solvent
  • $26 million the city’s shortfall as of July 1st; the city will be the largest in the country to seek bankruptcy protection; the cuts didn’t work source

» “All that’s left is sadness.”: Stockton’s failure to keep its budget in line is a bit of a lingering effect from the mid-2000s housing boom and later recession. With economic growth built on credit and expensive projects (including a sports arena) built during the stronger times, the city’s fall during the recession — it has the second-highest rate of foreclosures in the country — hit particularly hard. The city has stopped making bond payments, and on Tuesday, the city council voted to file for bankruptcy protection.

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10:12 // 1 year ago