State "Borrowing" from cities: Robbing Peter to pay Paul
Facing a huge deficit, Governor Schwarzenegger is proposing to "borrow" two billion dollars from cities and counties. Of course, cities and counties are up in arms. Faced with their own revenue shortfalls, they are already making deep cuts in local services. Facing the third raid on local revenues in twenty years, they are appealing to voter anger against Sacramento politicians.Ventura would lose $2.8 million in property tax revenue. Our city has already reducing spending on services by $11 million because of the economic crisis. Nearly 40 jobs have been eliminated and all staff are taking at least a 5% cut in compensation.
The League of California Cities has a new web site called "Save Your City" that allows residents to enter their zip code and hear a video from a local official or community leader blasting the State plan. You can also join the coalition to oppose the forced "borrowing."
Understandably, the argument is aimed at protecting local services -- the police, fire, libraries and parks that local residents rely on. But there is an even more powerful, if less emotional, reason to oppose the State plan: it only makes California's fiscal problem worse.
Of course, the State government has few options. The complicated and sloppy set of propositions designed to reduce the gap went down in flames. The Governor is now saying he must do what prior to the election he said he couldn't do -- balance the budget solely with cuts. Every day brings more news about just how difficult that will be.
But whether you think the State budget challenge is a "revenue problem," "a spending problem" or both, borrowing won't fix it. Postponing the problem only intensifies it.
Ventura has taken a different path. As difficult as it was to stop planting trees and fixing parks, to cut out Downtown foot patrol and reduce street maintenance, to cut beach lifeguards and cancel community events -- we had to balance our budget. The City Council did just that.
In life, my mother told me, you don't always get what you pay for, but you always pay for what you get. It's a useful point to remember. Plenty of people would like government not only to continue what it does today but to do more. There's a way to do that: pay for it. There's a way not to do it. Borrow from someone else with no plan for repaying it. That's what the State is proposing. It makes no sense. We will all be hurt if they go ahead with it.
posted by Rick Cole at
9:11 AM
11 Comments:
Please persuade Arnold to skip
Ventura for source of "money
to burn" loan prospect. City
lost mostly all of general
fund due to greed
speculation
investing scheme.
If nothing
else, state's
finance shortfall
mimics Ventura's!
you can whiine all you want about the state budget, when will you release the real truth about what the city council budget is and how it failed? cupidity reignes supreme, unfortunately!! b10652004@yahoo.com
Not sure of the legalities of the state raiding city and county monies. But this is the third time, there does not seem to be any legal reasons they can not do it. Since there was no legal defense pursued by cities and counties, it is assumed that this was a possible reality of a bankrupt state. So why did Ventura not plan on this to happen again? Instead, we are complaining. Get into the survival program.
Change what can be changed and move on. Great to see Ventura has balanced its budget with deep cuts to join the world. Get the local sales tax increase on the ballot, stop the needless spending on consultant studies - be your own consultant with responsibilties. Partner up the Ventura Unified to keep the teachers. How can you spend 4 years for a B.A., two years for a teaching credentials with 6 months student teaching for free, only to find part time employment or lay offs, despite paying your own monies for classromm supplies? These young teachers will move on unless they really love their work or are independentyl wealthy. Here comes the teacher shortages and large classrooms.
Ventura is run by a environmentalist type retirement mentality of don't change my backyard. So live with the means of no growth, promote your agricultural neighbors, forget dreaming about the Victoria corridor, or getting any kind of major industry to consider a stagnant city.
Your biggest issues are the increasing crime, gang influences, school delinquencies, and overcrowding of single family units. If the city continues to make cuts in police defense, then gun sales will be the next big industry in Ventura.
There is a price to no growth and sticking your head in the sand, you have more assets exposed to the world than you think.
I strongly disagree with the previous post. If you think we can "grow" our way out of this crisis, I believe you are mistaken. Perpetual growth is mathematically impossible in a constrained world. Just like reality set in with housing prices, in fact, we need to appreciate that we must anticipate negative growth.
The next twenty years won't look like last twenty. We have a lot we can change to ease the transition. However, better plan accordingly.
Did Los Angeles grow into prosperity?
I actually agree wholeheartedly with the third poster who points out, quite accurately in fact, some of the inherent problems at City Hall and with the City in general. The City just recently has shown again how out of touch it is with the real world around it by virtue of the ludicrous plan to spend $6 million on a complete redesign of Cemetery Memorial Park. Hello? I thought we were in a budget crisis here.
Although I certainly don't agree with imposing a new half-cent local sales tax in the City, I have no problem putting it on the ballot, with the full confidence that the voters will turn it down just like they did P-6 (the public safety sales tax in 2006).
I agree that the City Council has its head buried in the sand when it comes to allowing new development into the City. The arbitrary square footage limitations for retail stores on Victoria Ave., as part of the recently approved Victoria Corridor Development Guidelines, is another example of the City's closed-minded attitude towards tax-producing development projects (i.e., Wal-Mart) that could have helped the City with its financial woes. Instead, they shot themselves in the foot.
Your staffing is down, but your payroll / benefits are up, up, up.
Did police and fire really take a 5% cut? Or did they forgo a 5% increase in salaries/benefits? If I read the paper correctly, it is the latter. This is not a cut. Moreover, if the city keeps offering great retirment benefits like the 3% at 55 or the last talk of 3% at 50 the city will bell-up. At age 50 or 55 at 3% the city is paying a retired policeperson/fireperson 90% of a full salary. This retired person is likely to life another 30 years at 90% salary. This is a whole career time. Hence, for every 10 policepersons/firepersons the city employees, the city also has to play for 10 retired persons also. This is just too pricey. The city need to return to the old-time standard for 2% at 55 or the city will go bell-up within twenty years.
It appears there are lots of anonymous posters who have lots of suspicion of financial mismanagement in Ventura and belief that a different City Council and administration would not be facing tough times in the worst economic downturn since the Depression.
Obviously if you look back over ten years and millions of dollars in spending and investment, anyone can find things to criticize, both fairly and unfairly. But Ventura has actually done well over that period. My predecessor worked with the City Council of the time to make major investments in catching up on street repair and other vital infrastructure investments. This City Council has added much needed public safety staffing to keep our community safe.
While many private citizens blast public sector pay and benefits, Ventura's salaries and benefits are actually below the average of other public agencies in the area. In fact, all staff did accept 5% reductions in their compensation. The only "giving up" a promised increase was Fire, who postponed the change to 3% at 55 for another year. They remain the only agency our size or larger in California still under the current plan.
As for economic development, this issue is fought out each election and, by and large, those most identified with pro-growth policies fall short of getting elected. Still, despite the generally "go carefully" sentiment in the community, our per capita sales tax is still tied as the second highest in the County and we've seen far fewer foreclosures than in neighboring Oxnard.
City government and management are far from perfect. The recent Economic Summit brought together a wide range of viewpoints that showed remarkable openness to new and better focused economic development efforts. I hope some of those posting their dissatisfaction with current policies participated in a constructive way . . .
Rick,
On the topic of economic development, my sense is that the tide is turning in the City with respect to the public's willingness to accept more growth, albeit high quality, measured growth, that results in higher sales taxes for City coffers to provide for services that residents deem important (public safety, streets and infrastructure maintenance, parks and recreation, arts/cultural and community events, etc.).
The alternative to more tax-producing retail development is higher taxes, which no one is going to buy into in this harsh economy. The City Council's reluctance to embrace and encourage a certain amount of beneficial growth is going to be readily apparent to the public by the time November rolls around.
3% at 55 or 50 is still too pricey even if other cities have done the same. I forsee all big cities restructuring these retirement "promises" in 10 to 20 years. City governments should look at GM. GM's long term health and welfare benefits were too pricey as I wrote about in the late 80's. Now, GM has to restructure because they "over" promised. City governments are on the same course! You have been warned. I will write you again in 15 to 20 years, if I am still alive, and say "see, I told you."
2% at 55 is the history normal, stick to it or go insolvent in the near future.
Arnold should enact the Cloward Pivens Statagy against all the liberal / progressives / Marxists ( as in D'Ohbama ) / and Statists who have controlled the legislature lo these last number of years. If you don't know what Cloward Pivens is - Google it. He should immediately shut down all welfare, benefits for all illegals and anything else not within the state budget. Then he won't take anything from the cities and he will single-handedly decimate all of the garbage foisted on the citizens by the the liberals. He has got the mandate to do it - does have have the juevos ?
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