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Cars drive through downtown Stockton, the national leader in foreclosure rates back in 2008.
Stockton has already been criticized as having some of the highest unemployment and crime rates in the country, and now the city is struggling to save itself from bankruptcy. Hard-hit by the housing collapse, Stockton property taxes took a nosedive, and the city has since been unable to pay its bills.
To deal with a $15 million deficit, Stockton has made painful cuts to numerous programs, including its police department. Still, the attempts to regain its footing haven’t been enough, and now the northern city now faces the possibility of becoming the largest in California to declare bankruptcy.
Last night, Stockton's city council voted to seek mediation with its creditors. California law requires that step before a city can ask for bankruptcy protection.
However, many people in Stockton opposed the vote, seeing it as just one more step toward the inevitable. Bankruptcy, on top of unemployment and crime, could cost 1,000 retired city workers their pensions.