SAN FRANCISCO — Stockton may not exactly be the next Vallejo, but similarities between the two California cities have started people talking.
Stockton, located 80 miles east of San Francisco, is more than twice the size of the Bay Area’s Vallejo and also has much more debt outstanding, making it one of the largest and more significant municipalities in the country teetering on the edge of bankruptcy.
As in Vallejo, Stockton officials say its finances are severely strained from a steep drop in revenues due mainly to the housing bust, while labor costs locked into contracts continue to rise.
Jeff Michael, director of the business forecasting center at the University of the Pacific’s business school in Stockton, said development and construction in the housing sector had been a major driver of the city’s economy, and was essentially wiped out.
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