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How did Stockton, CA go from boom to bust?
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A look at the most populous U.S. city to go bankrupt
- Duration 4:19
- Date Jul 31, 2012
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Transcript
This transcript is automatically generated
Welcome back to Stockton California and the agriculture rich San Joaquin Valley.
As we just told you the top of the program Stockton is number one on the list of most populous American cities to go belly up financially.
When you get here it does not take long to find out you're in -- town in deep fiscal trouble.
And spend -- night on the tough streets of Stockton.
And you really sense the states for the city in the favorite sinker is -- part -- and the 300000.
Who live here.
Life and death probably get a nice night.
If the officers disappear the gang bangers will be here in a heartbeat -- you want to go back lot of people who -- -- find their own guns.
-- they're gonna have to.
Since 2010 and the city has slashed a quarter of its police force they've had to focus on crimes in progress and violent crimes.
-- and Johnson a Democrat elected in 2008.
Concedes.
Her constituents are less safe.
What we've seen a spike in is the violent crime.
And frankly in the homicides socket is a city in in the midst of terrible terrible social breakdown.
Not just fiscal collapse.
With social collapse the Manhattan institute's Fred Segal has written extensively about cities like Stockton.
Going broke Stockton is falling apart.
It's a horrible thing to see.
Stockton sits in the middle of the fertile farmland of California's central valley.
It's also an inland sea port connected to San Francisco Bay by 78 mile deep water channel.
A gold rush town in the 1850s.
They grew into a regional transportation hub.
A navy base year anchored a vibrant twentieth century blue collar economy shipbuilding steel mills and other heavy industry.
But by the 1990s the base and many of the factories were gone -- in signature waterfront.
Had become a place to avoid.
It was a terrible place and Johnston was on the City Council that instead of being the front door of our community -- it was the back door.
Still California's economy was roaring driven by dot com millionaires in nearby Silicon Valley council and the mayor at the time said we need to.
Fix this problem in the heart of our city.
With taxpayers' money and it's seemingly limitless ability to issue municipal bonds and stock didn't tried to spend its way back to prosperity this.
Rough and tumble honky tonk town was going to be remade.
And identified as part of the greater Bay Area.
24 million for a Minor League Baseball park 150.
Million for -- 111000 seat arena.
30000 -- slept for a yacht marina and extort a new million dollar town home it's.
Johnston says she was out of office when city officials okayed.
The price is projects there -- a failure in leadership in the sense of you know -- good times we'll continue to roll.
-- may also didn't say no to the unions that helped elect them.
Salaries benefits and pensions for police firefighters and other public employees went up and up.
They felt that the money would continue to roll in that property values would continue to rise.
Ben -- in the mortgage meltdown of oh wait foreclosures soared tax revenues dried up and -- -- couldn't pay its bills.
Faced with cuts and staff and salaries the police union in 2010 erected this billboard.
Cuts war made.
But union vice president bill -- don't says no more than anything that we offered them.
They keep upping it until -- so what we give them.
Last February Stockton defaulted on 32 million dollars in bonds issued to build parking garage it's.
It declared bankruptcy.
The biggest US city to do so.
Bondholders have already foreclosed on a new City Hall.
The stadiums and the marina could be next frankly.
We don't have the money we don't have the cash the mayor vows no more staff cuts to police and fire.
Her constituents.
Can only hope.
Last year Stockton set a state record for murders per capita.
A record it's likely to break into one -- well.
