Friday, May 4, 2012
Stockton May be on the Cusp of the rebound
Yes, the same Stockton that's on the verge of filing for bankruptcy protection. In fact, it's leading all California metro areas in job growth. From Reuters:
The Business Forecasting Center of the University of the Pacific in Stockton estimates a 5 percent increase in payrolls in the Stockton region for the 12 -month period ending in March. Jeff Michael, the center's director, said the city's economy is finally starting to recover from the knock-on effects of the area's dramatic housing crash. The region has "clearly joined the recovery," he told Reuters on Thursday. Local job growth will run at about 4 percent this year and about 2 percent annually through 2016, he said.
Of course, all this take time to move through the system - possibly too much time to avoid a trip to bankruptcy court. "If I had to bet, I'd bet the city would probably enter bankruptcy," Michael said. "The problem is too deep and too complex and involves too many parties to reach a negotiated solution in a few months." At this point, there are three possibilities: Slashing more services and staff, restructuring debt by working with creditors, or filing for Chapter 9, which is municipal bankruptcy. City officials presented those options at a Town Hall meeting. From the Stockton Record:
A participant elicited applause by next suggesting the city could save $300,000 a year by firing [City Manager Bob Deis]. The city manager - at the time seated with his back to the personal attack - shook his head and smiled. City firefighter and Stockton resident Mike Pasqualicchio took aim at [Mayor Ann Johnston] for being on the City Council in the 1990s that cast "uneducated" votes for increasing city retirees' health care - the bulk of Stockton's problems today. Johnston responded that Stockton got caught in a statewide trend that began when the California Highway Patrol first received enhanced retirement benefits. "Yes, I voted on a couple of those," Johnston said. "I was assured by city staff that this was something we could afford. Did I ask the right questions? I thought I did at the time." Deis defended Johnston by saying that city staff at the time was at fault for failing to provide the council members with the fine print.
More by Mark Lacter:
The Romney supporter who says income inequality is a good thing
Don't look now, but Stockton's economy is turning around
Guilty plea in kickback case involving unemployment insurance
Big weekend shaping up for 'The Avengers'