Stockton is to become the largest US city to file for bankruptcy, the seventh American municipality to do so this year.
A bankruptcy declaration by the Californian city of nearly 300,000, about 85 miles east of San Francisco, was expected as early as last night. It is more than $700m (£450m) in debt, having suffered from fiscal mismanagement over two decades and the collapse of its once booming housing market.
Stockton has cut more than $90m in spending in recent years and slashed its workforce, including a quarter of its police officers, despite a surge in violent crime. Deeper cuts to police payrolls would be intolerable, city council members said.