Third California City Seeks Bankruptcy Protection

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For the third time in two weeks a California city has declared bankruptcy.

San Bernardino, a city of about 210,000 people, joins several cities in crisis across the country. The cities are tapped out and taking drastic measures.

San Bernardino is $46 million in the hole, and it's warning municipal workers it might not be able to make its payroll in coming months. The city is the latest to throw in the towel.


Stockton, Calif., became the biggest U.S. city in history to declare bankruptcy on June 28, and last week, Mammoth Lakes, Calif., filed for Chapter 9. They're all victims of the housing bust, declining revenues and mounting debt.

It's not just California; cities across the country are dealing with difficult financial times.

In Scranton, Pa., the city and its workers are in the middle of a fierce battle. The mayor defied a court order and slashed the pay of 400 employees down to the minimum wage, $7.25 an hour.

"The reality is because council's underfunded their budget, we don't have any money," Scranton Mayor Chris Doherty said. "We have enough money to pay minimum wage, and if more monies come in we'll be happy to make those payments."

Angry union members say such wages are not enough to make ends meet.

"Most of the members I talked to -- because they live paycheck to paycheck, said, 'I might have enough savings that maybe I can forego the vacation right now and make sure that the bills get paid. But after a couple weeks, I'm going to be in some real financial hardship here,'" John Judge, head of the Scranton Fire Union, said.

At this time, no one has the answer as to where the money will come from. Scranton's budget deficit is almost $17 million.

As recently as last month, no city in California had filed for bankruptcy since 2008, and no U.S. city of more than 200,000 people had ever declared bankruptcy.

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CBN News
Mark Martin

Mark Martin

CBN News Reporter

Mark Martin is a reporter and anchor at CBN News, covering various issues from military matters to alternative fuels. Mark has reported internationally in the Middle East and traveled to Bahrain to cover stories on the U.S.S. Dwight D. Eisenhower. Follow Mark on Twitter @MarkMartinCBN and "like" him at