Stockton, Calif., will become the largest U.S. city to seek protection from its creditors after its leaders approved a budget yesterday based on the city filing for bankruptcy, Reuters reported today. A chapter 9 filing by the city of nearly 300,000 in California's Central Valley, about 85 miles east of San Francisco, could come as early as today. Stockton's city council voted six to one in favor of the 2012-2013 budget after a contentious five-hour meeting where angry retired city workers pressed council members to reject the $155 million spending plan. It proposes eliminating retirees' medical benefits to help fill a $26 million budget deficit. The council's vote followed three months of confidential talks between Stockton and its creditors aimed at averting bankruptcy. The negotiations ended on Monday with the city failing to win enough concessions to help close its shortfall for the fiscal year starting on July 1. That left bankruptcy as the only way for Stockton to balance its budget in the near term while maintaining its current level of services and bringing stability to its battered finances, Mayor Ann Johnston said.
