Officials in Stockton said Tuesday that mediation with creditors has failed, meaning the Central California city is set to become the largest American city ever to declare bankruptcy. …
The river port city of 290,000 in Central California has seen its property taxes and other revenues decline, while expensive investments and generous retiree benefits drained city coffers.
via NY Daily News.
Tell me something I don’t know, right?
Stockton, with 300,000 residents and $700 million in debt, would be one of the largest cities ever to file for Chapter 9 protection, according to municipal finance experts and bankruptcy officials.
Humm…. ok. Let’s compare that to Chicago.
Calling local government debt “staggering,” Cook County Treasurer Maria Pappas announced Tuesday that the $108 billion debt tab across various governing bodies in the county translates to $63,525 per Chicago household and nearly $33,000 per suburban household.
via Chicago Sun-Times. (Sept 29, 2011 — we now know the number to be higher.)
Math (not new math, the old fashioned kinda math.)
$700M / 290,000 residents = $2,413.80 of debt for every man woman and child in Stockton.
In order for the situation to be comparable, the dazzling urbanites of Chicago would have to earn 10 x as much as the poor downtrodden folks of Stockton.
Back to the Census:
Chicago Per Capita Money Income in Past 12 Months — $27,148
Stockton Per Capita Money Income in Past 12 Months — $20,176
So the average joker in Stockton has to work for about a month and a half (2413 / 20176 *365 = 44 days) to pay off their portion of the debt.
The average joker in Chicago has to work for nearly a year (24344 / 27148 * 365 = 327 days) to pay off their portion of the debt.
And so I ask you which one of these municipalities should really be filing for bankruptcy? Which is in worse financial shape? Who’s employee’s should be more worried about their pensions? Who’s politicians are doing the right thing by dealing with the issue square-on and not trying to pawn it off on future generations?
I’m just asking.
Hat Tip to Anthony Curran for the concept of this post.