Stockton Officials’ Lousy Decision-Making Led to Bankruptcy

The bad decisions are all too easy to describe. Back when times were better, Stockton embraced a combination of overly generous compensation packages for city employees and excessive debt spending—not only on pension bonds but also on bonds to pay for redevelopment projects, which were supposed to revive the downtown area. Stockton was awash with the revenue that poured into their treasuries during the boom when home prices were so high and squandered tax dollars to embark on ill-conceived development projects, including subsidized stadiums. They predictably failed. The biggest problem for Stockton and other cities such as Mammoth Lakes, which followed Stockton into bankruptcy on Monday, wasn’t the property bubble but what they did with the revenue. The real question is whether officials in other California cities will learn anything about fiscal discipline and stop blaming unforeseen economic consequences for their own bad decisions.

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