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Stockton Going Broke Shows Cop Pay Rising as Property Collapsed

The bankruptcy that Stockton, California, resisted for three years is now at its doorstep, spurred by the weight of retiree costs, the housing bust and accounting blunders that drained the city’s coffers.

Stockton, 80 miles (130 kilometers) east of San Francisco, rode the boom-and-bust cycle of the 2000s with a surge in new-home construction that attracted buyers seeking an affordable alternative to Bay Area real estate. Then a crash came, as homeowners faced a wave of foreclosures that sapped the city’s tax-revenue gains.