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Stockton, Calif. expected to file for bankruptcy

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    City leaders blame housing market, pension costs

  • Duration 2:12
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All right now the city of Stockton California is set to become the largest US city.

To ever declare bankruptcy.

The City Council voted last night to push this through in the official filing -- could come at any time -- is about.

Eighty miles from San Francisco where refiner very -- cloudy -- -- and with more Claudia.

-- city leaders spent three years making deep cuts than the past three months trying to mediate a deal with creditors to avoid reaching this point.

But with no way to restructure hundreds of millions of dollars in debt the city will file for bankruptcy either today or tomorrow.

The central California city of roughly 300000 people.

Facing a 26 million dollar budget shortfall and a staggering debt load of about 700 million dollars.

City leaders blame the -- housing market stock -- has the second highest foreclosure rate in the country.

And soaring pension costs in fact more than ninety retirees there make 100000 dollars a year a lot more than the average in California.

Crime increased while the port city investing billions in a downtown redevelopment plan that never materialized.

Reports are that some of the new buildings are now infested with rats.

Last night the City Council approved a spending plan that paves the way for bankruptcy and they got an earful from angry residents.

Where -- that money gone.

What hasn't been used for over the years you have made promises.

That we would be taking care of when we retired.

We gave up raises we gave up -- as we gave up everything.

And now you're telling me now.

Those retirees will certainly feel the pinch the new spending plan virtually eliminates their city funded health care.

And while the mayor insists it will be all business as usual many do expect more service cuts higher parking tickets and new deals with those unions.

-- is only through bankruptcy that they can renegotiate some of these labor agreements and you can bet every city struggling with high pension costs will be watching Stockton closely.

To see whether bankruptcy as a tool to get out from under might also be an option for them.

How are you see if it -- that house hopefully they get back on their feet that's for sure Claudia thank you.

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