By Mark Niquette – Feb 26, 2012 9:05 PM PT
U.S. governors of states where municipalities filed for bankruptcy say there was little they could have done, even as cities such as Stockton (3654MF), California, crack under continuing fiscal pressures.
Stockton, a Central Valley agricultural center with a population of 292,000, this week may take the first steps toward becoming the most populous U.S. city to file for bankruptcy, and will consider defaulting on $2 million of debt payments, officials have said. California (STOCA1) Governor Jerry Brown said yesterday he wasn’t prepared to discuss the situation.
“I want to see what exactly there is,” Brown said in an interview at the National Governors Association meeting in Washington. “They’ve started a process, and that process will continue to proceed, and hopefully the city and the creditors will find some reasonable accommodation.”
While an improving U.S. economy is helping boost revenue for states, cities face declining aid and a drop in the property-tax take since the housing crash. Cities under fiscal stress are trying to avoid bankruptcy and bolster their finances, including Pontiac, Michigan, which abolished its police and Cleveland, which demolished thousands of condemned structures to preserve property values. Such actions aren’t always sufficient.
Read entire article at Bloomberg – U.S. Governors Have Few Answers as Cities Face Bankruptcy Risk