Stockton, Calif. Sits Atop ‘America’s Most Miserable Cities’ List

Chicago would seem to be on quite a roll these days. The city is a leading contender to host the Summer Olympics in 2016. The hometown Cubs had the most wins of any team in the National League last year and are one of the early favorites to win the 2009 World Series. And, of course, one of its own just became the most powerful person in the world (we’re not talking about Oprah either, but she’s close).

So with all of the good vibes coming out of Chicago, how does it show up as the third worst city on our second annual list of America’s Most Miserable Cities?

Lousy weather, long commutes, rising unemployment and the highest sales tax rate in the country are to blame for the Windy City being near the top of our list. High rates of corruption by public officials didn’t help either.

Misery was up around the country in 2008. Market meltdowns, bank blowups and bailouts and cratering home prices often overshadowed the incredibly positive stories of 2008 like the Beijing Summer Games and the historic election of Barack Obama. The highly watched Misery Index spiked as the unemployment rate plus the inflation rate surged to 9.6 in 2008, up from 7.5 the previous year. It was the highest annual level since 1993.

Our own Forbes Misery Measure saw a shuffling of the deck among the top 10 cities, with five new candidates getting a failing grade this year. Topping the charts is Stockton, Calif., which was the runner-up on our list last year.

The Most Miserable City

Stockton ranks in the bottom seven in four of the nine categories we looked at: commute times, income tax rates, unemployment and violent crime. Only New York City has a higher income tax rate than what Stockton, and all California residents, are forced to pay.

Stockton was ground zero for the housing boom and now the subsequent bust. Home prices more than tripled between 1998 and 2005 and then came crashing down last year. Stockton had the country’s highest foreclosure rate last year at 9.5%, according to RealtyTrac, an online marketer of foreclosed property. Things are not looking much brighter in 2009 as housing prices are expected to fall another 36% on the heels of a 39% drop in 2008. Also, unemployment is expected to jump to 13.3% from 10.4%, according to economic research firm Moody’s Economy.com.

“We are engaging the entire community and encouraging everyone to get involved and help us find solutions that meet the needs of our community,” says Stockton Mayor Ann Johnston. “Volunteerism is encouraged, looking out for your neighbor, and taking personal responsibility where individuals can make a difference. We are partnering with all community organizations–schools, churches, non-profits– to provide support services and help individuals and families get through these difficult times.”

We compiled our rankings by looking at the 150 largest metropolitan statistical areas in the U.S., which meant those with a population of at least 378,000. We ranked those metros on nine factors: commute times, corruption, pro sports teams, Superfund sites, taxes (both income and sales), unemployment, violent crime and weather.

For this year’s ranking, we added the corruption component. We used the criminal conviction of government officials in each area over the past decade as compiled by the Public Integrity Section of the Department of Justice. This division of the Justice Department was created in 1976 to focus on “crimes involving abuses of the public trust by government officials.”

A Little Corruption Problem

The U.S. Attorney’s Office for the Northern District of Illinois, which includes Chicago, has been very busy in recent years. They convicted 385 public officials of crimes over the past decade, a per capita rate that puts it in the bottom third of big U.S. metros.

The Northern District office boasts of recent successful prosecutions, including “a corrupt former governor of Illinois, Chicago officials who rigged city hiring, individuals who lied about their support of foreign terrorism, corporate executives who cheated public shareholders and traditional organized-crime bosses who were responsible for notorious murders.”

Illinois’ record of public corruption, particularly in the governor’s office, is staggering. Five of the past nine governors have been charged with crimes, and three, as of now, have served time in prison. Whether former Gov. Blagojevich will do any jail time is still to be determined.

The misery in Chicago runs much deeper than just corruption, though. Unemployment is expected to surge to 9.2% in 2009, up from 6.6%. The Tribune Co. is mired in bankruptcy, while big local employers like Midway Games, Motorola and the University of Chicago Medical Center have all announced big layoffs.

Residents have been showing their dissatisfaction with Chicago with their feet, perhaps fed up by the average low temperature of 17 degrees in January. There has been a net migration of people out of Chicago for seven straight years, a trend that is expected to continue. And for all of the recent success of the lovable Cubs, last year marked the 100th straight season without a World Series championship. The title drought is 40% longer than any other major professional sports team.

Memphis Blues

Sandwiched between Stockton and Chicago is Memphis, Tenn. The home of FedEx has an incredibly high rate of violent crimes, with only Detroit faring worse. The 1,218 violent crimes per 100,000 residents is more than twice the rate in the New York City metro area. The city’s sales tax and rate of government employees committing crimes also fall within the 10 highest in the U.S. Pro sports has been a mess in Memphis in recent years as well. The city’s lone major franchise, the Memphis Grizzlies, has lost 74% of its games during the past three years, the worst in the NBA.

Detroit relinquished its 2007 crown of most miserable city despite a memorable 2008 that included a jailed mayor, the further deterioration of the auto industry and the NFL’s first zero-win, 16-loss season.

The Motor City benefited from our revised criteria this year (we added sales tax and sports teams in addition to corruption). Its 6% sales tax is one of the lowest in the country. The success of Detroit’s winter sports teams more than offset the ineptitude of the Lions. The Red Wings and Pistons won two-thirds of their games, including a Stanley Cup title for the Wings.