Two weeks ago, Stockton declared bankruptcy, unable to reach an agreement with creditors over a $26 million deficit in the city budget. Really? $26 million in a city of almost 300,000? Why not just raise property taxes?
It turns out that the issue is a lot more complicated. In 1978, California passed Proposition 13, an initiative constitutionally limiting property taxes to a maximum 1% of assessed valuation. As the result of falling house prices during the current downturn, property taxes fell. Even though homeowners started paying far less than previously, Stockton was prohibited by Proposition 13 from raising the tax rate and maintaining revenue. The city cut services, but increasingly was unable to balance the budget and service their debt. Consequently, they filed for bankruptcy.
The neighborhood around El Dorado School when I lived there was probably moderate income, middle class, and well-maintained. Economically and socially, it appears to have declined.
Shooting near El Dorado School, February 2012 |
During the current recession, Stockton's unemployment rate rose to nearly 18%. Currently, it stands at about 15.4%, nearly twice the national average. The neighborhood, once almost entirely white, is now more than 50% Hispanic, and non-Hispanic white has declined to 15%. Possibly, it has been impacted more than other neighborhoods by declining employment, particularly in occupations such as construction.
Somehow, sixty years of supposed U. S. economic growth and increases in opportunity haven't been realized in Stockton, at least not here.