The state of California, despite struggling with municipal debt, had not had a city declare bankruptcy since 2008. However, that streak has been broken. First, the city of Stockton became the largest US city to declare bankruptcy. Now, a second California town has cashed in its chips and declared Chapter 9 bankruptcy. San Bernadino, a California city with a population of 210,000, is now officially broke. A third (smaller) city, Mammoth Lakes, has also declared bankruptcy. That’s three failed California cities in less than two weeks!
“This is probably the hardest decision this councilwoman will ever have to make in this chair,” admitted Councilwoman Wendy McCammack.
San Bernadino’s 7-person city council voted four to two to declare bankruptcy, with one council member abstaining. San Bernadino faces a budget shortfall of $45.8 million dollars, has already stopped paying certain vendors, and may not even be able to make payroll over the next three months. San Bernadino is 60 miles east of Los Angeles.
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