Surely you have read about problems in Vallejo, Orange County and a number of other municipalities that are facing huge funding shortfalls due some very poor choices by elected officials who gave away the store in back room private deals struck with greedy public service unions, mostly representing police and fire union members. These deals and their true cost were hidden from the public by elected officials as they thought they could hide these deals until they got out of office. But alas were are now in a clearly foreseen public funding meltdown (spurred by inflation stock prices, the subprime meltdown and other causes) and now these little deals are coming to light as public officials scramble to find the dollars to fund them. But the dollars are not there and now they must sell tax increases on the poor schlep voters. In most cases they cant even cut back on the numbers of these employees. So its either raise taxes or cut the budget in other areas. Like LAAG loves to say..."well you got what you voted for"!
Thomas Elias: Warning signs for California cities
Vallejo's not alone when it comes to financial problems
http://www.appeal-democrat.com/articles/earthquakes_61643___article.html/warning_elias.html
March 18, 2008 12:01:00 AM
Like a swarm of small earthquakes that might — just might — turn out to be foreshocks of a Big One to come, the spate of near bankruptcies and other fiscal woes befalling small and medium-sized California cities this spring could be an early warning of far more serious trouble to come.
The city with the worst difficulties so far has been Vallejo, a medium-sized town on San Pablo Bay about 30 miles northeast of San Francisco that has never been quite the same since the Mare Island Naval Shipyard — opened in 1854 — shut down in 1996.
Under pressure from union contracts whose terms it simply could not meet, Vallejo came within days of declaring bankruptcy in late February, bailed out only when police and firefighter' unions agreed to trim a contracted pay raise from 10 percent to 2 percent. Firefighters also agreed to relax staffing requirements, allowing the city to operate two fewer fire companies each day than before.
But that might turn out to be only a stopgap measure, as Vallejo is like many other California cities, counties and school districts that will likely see revenue drop this year. State budget cuts already partially in force mean there will be less state money coming to localities in the next year. Falling property values will reduce property tax funds, while the overall near-recession means less sales tax money for everyone and stock market losses will mean fewer capital gains tax receipts.
Every restaurant meal forgone by cautious families, every home repair put off, every new car purchase delayed because of the slumping economy means less money coming into local government coffers just as surely as it means increased pressure on the far more publicized state budget.
Besides Vallejo, warning signals this spring have already come from Orange County, where supervisors warn of a possibly serious shortfall at budget time two months from now. The West Contra Costa Unified School District covering Richmond, El Cerrito, Kensington and several other cities, warns it has enough money to cover payroll and bills through June, but might not meet all its obligations beyond then.
Contra Costa County warns that some local sales tax receipts are down as much as 50 percent so far this year, while property taxes have not risen. But retiree health care costs are skyrocketing, with about 4,000 county employees due to retire over the next 10 years.
In Fresno County, officials warn their retirement plan may soon need to borrow money, just four years after taking a $400 million bailout loan. One consequence is that county employees will pay about 14 percent more into the plan this year than before.
The city of San Diego is putting new limits on retiree pensions in its effort to avoid a brush with bankruptcy. Employees who have not yet retired will no longer be able to collect benefits exceeding their annual salaries and will have to work longer to reach the top benefit level.
The Fresno suburb of Clovis warns it will have a $3 million deficit heading into the 2008-2009 fiscal year. To avoid bankruptcy, that small city will try for an 8 percent across-the-board spending cutback, and will ask for some employee "give backs" and voluntary furloughs.
It all adds up to an entirely new scene for government workers in California and their unions.
The days when savvy labor contract negotiating meant figuring out ways to extract maximum dollars and benefits are gone. Things become more complex when unions have to worry about making sure they don't take so much that they bankrupt their employers, thus forcing them to renege on many longstanding contracts and obligations.
It's almost like Aesop's old fable about the goose that laid golden eggs. The goose was in no danger of stopping until its owners got greedy and decided to check its innards to see if they could mine a large amount of gold all at once rather than settling for one egg per day. They cut it open, killed it and stopped the flow of gold altogether.
Similarly, public employee unions have not been satisfied with excellent jobs, good working conditions, solid pensions and health care plans, but continually press for more. Their greed is one big reason for the looming crisis threatening both state and local governments. Widespread bankruptcies would be the equivalent of the dead goose, as the big payouts public employees now get might quickly dwindle.
So it behooves them to give a little ground in this time of foreclosures and recession or near-recession, or the voting public might turn against them and install elected officials who won't go along with the steady increases to which unions and workers are now accustomed.
Thomas D. Elias writes on California politics and other issues. His syndicated column appears Tuesdays. E-mail him at tdelias@aol.com.
The bottom line of safety
Article Launched: 03/17/2008 06:12:24 PM PDT
http://www.sgvtribune.com/opinions/ci_8606407
PUBLIC safety is always the No. 1 concern of those who live in our region.
Public safety also costs big bucks, more of them every year.
Right now, many local cities are confronted with ever-higher costs for police and fire employees - especially for their retirement packages. After decades of work on the part of these indispensable people and their unions, their salaries and benefits are at extraordinary levels befitting their extraordinary performance.
But there's a point beyond which taxpayers cannot go. While no city wants to sacrifice public safety, many are being squeezed by aggressive bargaining tactics from public safety employee unions on one side, and reduced tax revenues from a slumping economy on the other.
Cities are required to balance their budgets; they can't borrow their way into the black, as the state Legislature and governor do far too often.
That's why it is crucial - today more than ever - for cities to take a strong stand against unreasonable demands for compensation from employee unions. Granting pay raises to police and fire employees that jeopardize fiscal solvency or lead to cuts in other services is foolish and irresponsible. When the budget tilts too much toward employee compensation, police and fire included, we believe the quality of life in the small and medium-sized cities of southeastern Los Angeles County and the San Gabriel Valley deteriorates.
Today, the city of Monrovia, population
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39,900, is getting prepared to take a courageous stand for fiscal responsibility. After months of considerate, reasonable negotiations, its City Council is ready to impose a one-year contract with the Monrovia Police Officers Association, albeit one that the union has already rejected.
We think the city has negotiated in good faith. We also see the city's offer of a 5.5 percent pay raise over 3.5 years - 16.5percent overall - as not only reasonable, but generous. Any other employee group in the private sector would be thrilled with such an offer during these troubled economic times. But the police officers' association reportedly wants a 23.2 percent raise.
The one-year offer to be set tonight will hike the salary of a police officer by 4.68 percent and a sergeant by 6.19 percent. Top scale for each would go to $71,064 and $91,512, respectively. The city's offer also increases the city contribution to retirees' medical benefits, which for employees of 25 years or more would be a one-time lump sum of $4,000. The city already offers the most generous retirement benefits of "3 percent at 50," which means an employee of 30 years, multiplied by 3percent, gets 90 percent of his salary upon retirement as part of the CalPERS system.
Again, these are generous benefits. In fact, we're concerned that cities are shortchanging other services to pay hefty salaries and benefits to city employees.
Monrovia's police union has used scare tactics in its campaign to get the largest pay raise possible, telling residents in 11,000 "robo calls" that the city has "ignored" officers' request for "the resources to make our city more secure." By taking advantage of a spate of gang shootings in December and January, the tactic is a new low in campaigning. We're not convinced that more officers is the solution. In fact, some union members have suggested not filling the four officer vacancies and distributing the savings to the existing members through raises, a councilman told us.
If more officers is not an answer, more pay for existing ones is no answer, either.
After 30 or so community meetings, city officials and neighborhood leaders say there needs to be a more comprehensive anti-gang effort, one that Mayor Rob Hammond says should include suppression combined with intervention programs, such as Monrovia's Youth Employment Service or summer job program.
These programs cost money. Expanding them costs money - money that Monrovia would not have if it went above and beyond a 16.5 percent increase.
Monrovia is acting responsibly in its budget decisions. It's time for Monrovia's excellent - and well-compensated - police officers to do the same.
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