Debt and defiance in bankrupt Stockton, California


Stockton, California has been forced to slash its police force even as crime rates have soared in formerly middle-class areas

From behind the wheel of her black and white patrol car, Sgt Katherine Nance points out a modest house behind a white picket fence.

It was built by her parents, and was where she grew up until she was a young teenager. "It was a good middle-class area," she says wistfully.

She says she rode around on her bike, babysat for the neighbours. Now the local park has become a haven for drug-dealers and a venue for gun fights. You wouldn't let a child walk around here, even during the day.

You might think this is the sort of change has come to many areas, and that it has been happening for years, all across America, for many reasons. Maybe.

But Stockton is part of a new trend: American cities that have gone broke and declared themselves bankrupt.

For Sergeant Nance, crime has spiralled upwards and her old neighbourhood spiralled downwards because of bad choices made by politicians. While you can't get away with murder in Stockton, it sometimes seems to residents you can get away with everything else.

'Most miserable city'

The former river port bloomed during California's first boom, the 19th Century gold rush, and Stockton has seen ups and downs over the years. But the recent economic crisis seemed to change everything.

Stockton recently became the largest city in the US to declare bankruptcy, but along the road to ruin also earned the title of "America's most miserable city".

The marina in Stockton, California Stockton is a city of contrasts - from an empty and boarded-up Main Street to a gleaming marina

Stockton has an unemployment rate twice the national average and jostles with many other places for the unenviable sobriquet of "America's murder capital".

Amid all these problems, it is crime and the sense of growing vulnerability that dominates the conversation of locals.

Sgt Nance clearly relishes her job as leader of a community response team. Their main role seems to be to disrupt the many gangs battling it out for control of the city streets.

We hear sirens nearby. Then she gets a message that her colleagues, in an unmarked vehicle, are in hot pursuit.

When we get there a young man with a wispy moustache and a sullen look is sitting handcuffed. He had accelerated away when they tried to stop him for speeding.

When they do stop him, a search reveals several bags of marijuana, a small rock of crack cocaine and a semi-automatic pistol.

There aren't as many officers on the streets as there once were. Police numbers have been cut by one-third, and police pay has been cut by up to 30%, those with the longest service losing the most.

Not surprisingly many officers have left. But it's not only that.

Stockton Mayor Ann Johnston appears for a meeting of the city council 26 June 2012 Stockton Mayor Ann Johnson says the city will rise again

The city can't afford to prosecute many offences. Many of those arrested have been let out of jail early. Sgt Nance feels this failure to disrupt petty crime often means criminals are at large, able to do something more serious.

Residents complain that the police won't investigate house burglaries and car thefts.

She agrees that for the most part, they don't have the resources to follow-up.

Many of the areas where I am taken don't look particularly bad: just row of after row of shotgun housing, some cared for with loving pride, others more dilapidated.

But Stockton is a city of very visible contrasts. Main Street is a horror: there are whole rows of boarded-up shops, and doors behind heavy bars and grills, pad-locked shut.

It is empty except for the occasional homeless man or woman walking nonchalantly down the street, clutching everything they own.

Less than a mile away, by the waterfront, multi-million dollar yachts idle in the marina, gleaming white, shaded from the sun by rows of white canvas awnings, the very picture of California dreaming.

But the half-empty marina has turned out to be a bit of a nightmare for Stockton.

Like the city's other prestigious projects - the ballpark, a sports stadium and hotels - what once must have seemed like smart regeneration turned out to be a pointless burden as the recession hit home.

Equally, what once seemed like decent treatment for city workers, i.e. generous health care, pensions and pay, particularly for firefighters and police, is now seen as absurd featherbedding.

Lost benefits

I meet the mayor, Ann Johnston, in her balloon shop. We can't go to city hall; it is closed one day a week to save money.

She says Stockton suffered from a perfect storm. These big projects left the city with no money in the bank, and borrowing expanded. Then the recession struck.

All of the city's money comes from property tax, and as property prices went into freefall, the local government's income was slashed.

A vacant home has weeds growing in the gutters in the Weston Ranch neighbourhood of Stockton, California in this 6 March 2012 One in every 195 Stockton homes filed for foreclosure in May

She says Stockton's latest dramatic move is the solution, not the problem.

Nothing changed the day after the city declared itself bankrupt. Stockton hasn't shut its doors and isn't giving up.

Indeed the bankruptcy is a device to avoid paying creditors and to avoid making even deeper cuts. But many are furious about what has happened. The mayor has faced an angry public meeting where city workers testified to the suffering caused by inept politicians.

She says the city will rise again, but Joanie Anderson is less sure.

Anderson is a former police dispatcher, and her husband used to be a policeman. They are both retired, but as they are well under 65, they rely on the city for their health insurance.

It is hugely important to them, but now their programme has been cut from the city budget.

"Our 18-year-old daughter has had four open heart surgeries since birth," she said. "Her last one was this February."

"So she has ongoing health needs that have to be put to the forefront in our family. If she has an emergency that involves her heart, it costs tens of thousands of dollars in the hospital."

But it would cost them $34,000 (£22,000) to replace their healthcare, if indeed any insurance company would take them on. They simply can not afford it and have no idea what to do.

Other city workers may have less dramatic stories, but find themselves in the same plight - they thought they had excellent healthcare, and now find themselves with none.

Stockton's descent into insecurity is chilling because it is not an isolated example.

As I left the city, news came that another California town, Mammoth Lakes, had filed for bankruptcy. And beyond each individual town, America itself is deep in the red.

Putting that right may mean as many difficult choices and as much pain.

Mark Mardell Article written by Mark Mardell Mark Mardell Presenter, The World This Weekend

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  • rate this

    Comment number 26.

    "But to me July 4th isn't about fireworks

    Its about being Free
    Its about being Independent from foreign powers
    Its about being a Sovereign Nation"

    Sounds like a swan-song to me : like the Ghost Dance at Wounded Knee, where native Americans finally abandoned their dreams. The Wheels has come full circle. .

  • rate this

    Comment number 25.

    9"I thought the UK had problems, but at least open heart surgery doesn't require a new mortgage to pay the bill in Europe."

    In fact all of Europe is mortgaged to the hilt.Public plus private debt in the UK is 600% GDP, more than any other nation except Japan

    Ca normally has one of the most dynamic economies in the world. If it were a separate country it would be among the top 10 globally

  • Comment number 24.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 23.

    10 Prop 13 was passed because people were losing their homes not because they couldn't afford to pay their mortgages but becaue they couldn't afford to pay their real estate taxes.Problem; blindness to financing the welfare state.Don't buy what you can't pay for.Defecit financing has gong wild.We're not as bad as Europe yet, that crisis is a warning to us.CA & US can survive through re-invention

  • Comment number 22.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 21.

    Yes our country is in excessive debt both federally+for many, at state level, also

    Yes its going to hurt+be real hard
    (they have already raised the taxes very high on us+
    this is just the start)

    Its gonna take many years to get our country back where we want it
    We just hafta be careful not to give up our freedoms in the process
    cause' freedom is worth more than any amount of money

  • rate this

    Comment number 20.

    Happy July 4th!!! Happy Independence Day!!! ;)

    No fireworks this year due to the severe drought here- Midwest is in most severe drought since 30s, the West is on fire, the East is flooded, without power+sweltering

    But to me July 4th isn't about fireworks

    Its about being Free
    Its about being Independent from foreign powers
    Its about being a Sovereign Nation

  • rate this

    Comment number 19.

    Maybe its the real face of the price of empire, americans think decent health care is socialism, but spending the peoples wealth on bombs from corporations so that other corporations can benefitis is not, its a welfare state for the rich.

  • rate this

    Comment number 18.

    What amuses me about US forums is the number of brainwashed dunces who claim that all US problems stem from over-entitled firemen, nurses and teachers. I can understand the super rich promoting such theories - thanks to tax cuts that deprive local communities of basic services, they're having a bonanza. But the rich don't blog on these forums. So who are all these sheep clamouring to be sheared?

  • rate this

    Comment number 17.

     Scotland is going the same way. Low morale among police officers and little or no deterrent to criminal behaviour.

    Kenny MacAskill, take note! Meanwhile...


  • rate this

    Comment number 16.

    3, Ethan Farber, the following is an example of what I read about US debt.

    "The real national security threat: America's debt
    Our growing national debt is a threat not only to domestic programs but to a U.S. tradition of an activist foreign policy that helped America prosper.",0,1409615.story

    It sounds bad.

  • rate this

    Comment number 15.

    Deputize all law abiding citizens and give each a gun. Anyone caught breaking the law would soon get the message that they're not wanted in the community. Stockton has become so dependent on its police force that they've lost the ability to take care of themselves. That what comes from decades of caving in to public employee unions.

  • rate this

    Comment number 14.

    First, why should we allow doctors and insurance companies to spend resources trying to save those born with deformities? Survival of the fittest, I say. If your offspring is weak then make another.
    Fire and police salaries are always the highest, but are there no other people willing to do the job for much less? Firemen drive a HUGE expensive vehicle to your place just to brag they can afford it

  • rate this

    Comment number 13.

    This is not just about a city that got it wrong it is the advanced guard of the accelerating decline of the American economy and way of life and of the growing gap between the wealthy and the masses of the poor. There will be many more Stocktons. Until a large section of the middle class demand economic management and social democracy the decline will be remorseless.

  • Comment number 12.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 11.

    Scott0962, you have it EXACTLY. This Republican mania for slashing taxes appeals to childish, selfish boobs who can't see that paying taxes is the price of civilization -- police, schools, services of all kinds. As long as US citizens refuse to recognize this truth, America at large will continue to decline while the rich fly first class to happier climes.

  • rate this

    Comment number 10.

    California's problem is that before Proposition 13 people voted for more services and government raised taxes to pay for them, after Prop 13 people kept voting for more services but government couldn't raise taxes fast enough to pay for the programs and services people demanded.

    Be careful what you ask for, you might get it. Californians have no one to blame but themselves.

  • rate this

    Comment number 9.

    I thought the UK had problems, but at least open heart surgery doesn't require a new mortgage to pay the bill in Europe. So what happens if the Anderson's daughter needs another heart transplant? They just leave her dying until someone pays?

  • rate this

    Comment number 8.

    I disagree with Ethan Farber that all of California's budget problems can be solved by raising taxes on the rich. California has the highest state income taxes in the US and the state is overdependent on the volatile incomes of the rich. Its sales taxes are among the highest in the US. The hole in the budget is Prop 13. Get rid of Prop 13.

  • rate this

    Comment number 7.

    I agree with Ethan Farber that the public's ability to legislate through propositions has been a great problem for California. However, while some wealthy have benefited from Prop 13, the prime beneficiaries are long time residents whose taxes have seen little increase for decades; the newest residents in pay the most property tax.


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