Stockton California prepares for largest municipal bankruptcy in history

STOCKTON, Calif. — The long, slow slide into financial collapse is nearly complete for this Central Valley community.

On Tuesday night, City Council members approved a new budget that will guide city operations during bankruptcy and amend a $26 million budget shortfall. With that vote out of the way, city officials could file for Chapter 9 bankruptcy as early as Wednesday, which would make Stockton the country’s largest city to go bankrupt.

The new budget will suspend debt payments, cut employee pay and reduce retiree benefits, allowing this city of about 292,000 residents to continue providing essential services through the bankruptcy process.

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