Stockton, California Files Bankruptcy, Mammoth Lakes Will Also File
Posted on July 2, 2012The city of Stockton, California is bankrupt. The city filed for Chapter 9 protection on Thursday. It is the largest city in the U.S. ever to file bankruptcy. In a statement, Stockton Mayor Ann Johnston said, "We are extremely disappointed that we have been unable to avoid bankruptcy." She said that the filing was crucial "to get our fiscal house in order."
To get out of bankruptcy, the city will have to make cuts to healthcare costs and pensions for retirees such as teachers, firefighters and police. There will be major cuts to police, fire and other city services, as well.
There are several other cities in California that are teetering on the edge of bankruptcy including Hercules and Lincoln. The Wall Street Journal reports:
Just this evening the City of Mammoth Lakes voted to file bankruptcy. The Sacramento Bee reports that Mammoth Lakes is filing because of a $43 million judgment that's more than twice the town's budget. Assistant Town Manager Marianna Marysheva-Martinez told the Bee that the city council just voted and papers will be filed by tomorrow.