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California Cities in 'Conga Line' For Fiscal Trouble

Vallejo started it. Then came Stockton. Mammoth Lakes. San Bernardino. Which California city will go bankrupt next? "There's a lot of them lined up in the conga line," said Marilyn Cohen, CEO of Envision Capital Management.

Up next could be the city of Atwater, where civic leaders will vote Wednesday night on declaring a fiscal emergency. They may even lay off a quarter of the town’s 90-person workforce....

"There's nothing wrong with California that can't be fixed," Chapman University's Joel Kotkin said. He said income and sales tax hike proposals on the November ballot may help the state's credit ratings in the short term, as more cash comes into Sacramento. Long term, though, he believes they hurt the state. "We will just be delaying the inevitable, and at the same time, chasing particularly young, upwardly mobiles out of the state.” He said Silicon Valley cannot save the state from another recession, only hard choices in Sacramento can.

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