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STOCKTON, CA. (CNN) – Struggling under a 26-million dollar budget deficit, the Stockton, California, city council has decided to file for bankruptcy. By a six-to-one vote, the council paved the way to file before the new fiscal year begins Sunday — and devised a plan for day-to-day operations. Stockton isn’t the first local government to file for bankruptcy since the financial crisis of 2008.
But it’s the largest city to do so.
The Central California city has a population just under 300-thousand. By filing for bankruptcy protection, the city says it will be able to pay employees and vendors. But it will stop some other spending, such as paying off debt.
