The city of 290,000 that rode the wave of the housing boom in the late 1990s and early 2000s now finds itself littered with foreclosed homes, saddled with pension, health care and other obligations it can't afford, and unable to pay its bills.
The City Council voted last month to suspend $2 million in bond payments and begin negotiations with bond holders, creditors and unions. A new California law requires that cities begin a 60-day mediation process before filing for Chapter 9 bankruptcy, though city leaders can file at any time if negotiations stall.
Though many communities across the country are struggling with their finances and some already have filed for bankruptcy — Pennsylvania's capital of Harrisburg, Jefferson County, Ala., and little Central Falls, R.I. — Stockton's litany of problems stand out.
The unemployment rate has doubled over the past decade and now hovers around 16 percent. A fifth of residents live below the poverty line.
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