Years ago, Californians attempted to limit the growth of statewide government spending by placing a cap on how much one’s property tax could be raised in any year. However, local governments not satisfied with living within their means and buffeted by internal pressures; they exploited a loop hole. Simply put, all ‘revenue enhancement’ was in the form of raising the fees for many activities well beyond the original cover-their-cost intent. All one has to do is look at a comparison of how much it costs to offer a service and how much is charged for the service. For example, water and trash collection fees have been highly inflated as well as cell phone ‘taxes’ in which the cities have no real cost or negliable.
The problem of increased fee’s is mainly a symptom of poor management. Local governments have inflated each others salaries beyond reason ( review case of the City of Bell). In our town San Luis Obispo, California of roughly a mere 40,000 people we have a city manager who makes over $300,000 a year not including perks. Our little county ended up having to fire it’s chief and second in command for — what I would call — lapses in ethical judgement. In the midst of the worst economy in history, they are still hiring!
So are we surprised at what is currently on the November Ballot??
So, here we are. However, we have not discussed the giant financial crisis that looms ahead. Cities have what are called ‘unfunded liabilities.’ These are obligations — many related to retirements past and future — that are growing exponentially. Some cities have chosen or looking at bankrupsy and defaulting on all their retirement benefits rather than face the voters and the unpleasant realities early in the process. What this means is that a retirement isn’t just scaled back, but cut to zero.
So here are a few questions I would think would be fundamental to ask today’s candidates for local office:
- What are your plans to manage the projected revenue shortfalls?
- Do you believe that raising fees is key to solving fiscal shortfalls?
- Do you support citizen effort to bring fee requests for a public vote?
I am sure there are many other worthwhile questions to ask… but these need to be answered first.
November 2nd isn’t that far off!
Roger
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More Reading:
“The two largest pension funds in California, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), have lost billions of dollars in value. Hundreds of thousands of retiring state employees and teachers now face the stark choice of accepting much reduced pension checks or working past their retirement age.”
“How bad is it? It’s this bad. A new Stanford study indicates that the State of California’s unfunded liability for its three largest public employee pension systems will grow to half a trillion dollars by 2025. Is there any better example of the tyranny of government, that it would plunder the wealth of several generations of Californians. With these results, how can anyone justify electing the same people over and over again to the California Assembly?”
“While it surely is not the preferred method of dealing with financial shortfalls, the approval by the Vallejo City council to change their firefighter pension agreement may set the tone for the rest of our state. Sadly, Vallejo had to file for bankruptcy protection before organized labor saw the handwriting on the wall….”
““We found the city’s system of internal control to be nonexistent, as all financial activities and transactions revolved around one individual, the former chief administrative officer, who had complete control and discretion over how city funds were used,” the auditors wrote.”
“An investigation by California Watch early this year found the state’s local governments and tow companies generated an estimated $40 million from checkpoint impounds in 2009. Many of the unlicensed drivers who lose their cars at checkpoints are illegal immigrants. The Cedillo measure was touted as an anti-corruption provision since police officers in Bell, near Los Angeles, admitted last month that the city used revenue from impounds to pay top officials massive salaries. Bell police referred to checkpoints as “tow-a-thons,” says former Sgt. James Corcoran, who investigated corruption issues in the city.”
They also have a facebook page which can be useful
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