Why government is so expensive in California
July 25, 2008
Michael Shires, professor of Public Policy at Pepperdine scratches the itch of why government is so expensive in California; including local county and municipal governments. Shires argues that it is just not a matter of increased taxes v. cutting services; this is how Democrats and Republicans in the California legislature paint the picture. Rather, revenue declines are only a small part of the problem. While services and their cost actually do not increase, the annual increase of secretly negotiated salary, benefits, and cost-of-living increases benefitting unionized public employees is killing budgets, savings, and family finances statewide. Read more
Quo vadis, Vallejo?
June 25, 2008
Taxpayers in Contra Costa (and around the world) are closely watching the implosion of the City of Vallejo into bankruptcy and wonder at potential outcomes. This week Vallejo asked judges to void four contracts with unionized public employees. A hearing is set for July 23. The city faces its first major bankruptcy milestone, tomorrow, Friday June 27, when city and union officials present their initial arguments to the court.
With an eye toward similar potential disaster in Contra Costa County, some wonder if it’s even possible to void such contracts. One observer opined that pro-union Democrat legislators have helped install safeguards against such
action, while another informed source quoted the California League of Cities, saying it was possible.
Meanwhile, an Open Letter that appeared in a recent edition
of Police Pay Journal, defends firefighters and police against poor municipal management and bad PR. Read more
Vallejo test case for unloading extravagant public employee contracts
May 13, 2008
According to SFGate, By declaring bankruptcy, Vallejo has thrust itself into the national spotlight as a test case for thousands of floundering cities desperate to unload their extravagant public employee contracts. Read more
ALEC Laffer report shows California in poor shape
April 10, 2008
A new publication by the American Legislative Exchange Council, Rich States/Poor States: ALEC-Laffer State Economic Competitiveness Index, is an invaluable resource for state lawmakers and citizens to evaluate their state’s fiscal and economic policies, while analyzing their results and ramifications. See the Home Page for the report. See the section on California.
Here is the Executive Summary, with excerpts:
It is telling that a state as beautiful as California has the nation’s second-largest domestic population outflow. Despite warm weather, sandy beaches and the Pacific Ocean, Californians are leaving in droves to escape the state’s oppressive tax burden. These former citizens are generally the “highest achievers and those with the most wealth, capital, and entrepreneurial drive,” leaving the state much less economically productive in their wake.
… some states show little concern for spending restraint, whether during times of prosperity or poverty—in some cases spending their way into financial ruin. The case of recalled governor Gray Davis of California serves as an important example. By coupling high taxes with rampant government spending, California had a budget crisis of historic proportions. At the time, Carl DeMaio of The Performance Institute argued for the “need to stimulate the economy without further burdening taxpayers or driving more businesses out of state.” It is clear that California did not follow that advice and still doesn’t. Unless our current lawmakers choose the path of fiscal restraint, the mistake could soon be repeated.
This is not about Republican versus Democrat, or left versus right. It is simply a choice between economic vitality and economic malaise. To become competitive in the global business environment of the 21st century, states must have free-market, pro-growth tax systems in place, rather than increasing the ever-burdensome role of government on citizens. May this publication help lawmakers act responsibly by encouraging capital formation and allowing the dreams and entrepreneurial spirit of their fellow man to flourish.
Check out Vallejo Independent Bulletin
April 1, 2008
Word! Check out Marc Garman’s Vallejo Independent Bulletin to get all the dirt. For instance, you just won’t believe what the VIB has uncovered as the City Council’s new weapon to keep Vallejo from bankruptcy.
Perata’s bizarre comments muddy school funding debate
March 18, 2008
This guy is nuts. Termed-out Democratic Senate leader, Dom Perata, laid out some insane claims yesterday in his whistle stop tour of the Bay Area to drum up support against education cuts during California’s budget crisis. Perata was flanked by local democrat soldiers, Assemblyman Mark DeSaulnier, who will be unopposed in the Democrat Primary for Torlakson’s seat, along with termed out Senator Tom Torlakson, who will be running for DeSaulnier’s seat; kind of a Contra Costa County two-fer.
When informed businesses are importing foreign workers that can actually read English while the government run schools fail to teach American kids how to spell, Perata lambasted business instead of poor school performance, “What the hell kind of sense does that make,” he railed while pounding the podium with a shoe.
Here’s a good one: “Can we afford to pay more taxes,” Perata asked? “No. But do we have to pay more? Yes, and we will.” If this guy keeps answering his own questions like this, California will be bankrupt before the guys in the white coats come with the meds.
Perata and his thralls in the Assembly have built the structural budget mess California is currently in by spending $400 million to $600 million a month more than it takes in.
Police, fire employee benefits bankrupt Vallejo — Gilroy next?
March 5, 2008
Folks are getting nervous Gilroy over public safety benefits they can’t afford. See a recent editorial in the Gilroy Dispatch. To understand how 3 @ 50 works, go to: www.porac.org/3percent@50.html.
How cities like Vallejo can solve fiscal crisis and avoid bankruptcy
March 3, 2008
According to the California Foundation For Fiscal Responsibility (CCFR), Vallejo is not facing a municipal fiscal crisis alone in California, it is just the first city to run out of cash. The root cause is promised increases in wages and benefits for government employees that are not supported by tax revenues.
Looking for answers, Vallejo leaders have chosen to reduce services and increase fees to close an $8 million shortfall. The unions have reluctantly agreed to accept smaller raises than provided by their current contracts and they have agreed to personnel cuts. The city is asking bond holders for more time to pay which only increases future interest costs. Spending on infrastructure and much needed road maintenance will be curtailed indefinitely. CFFR recommends immediate adoption of the following steps toward fiscal responsibility:
1. Stop Illegal Payments for Extra Pension Benefits Related to Services Rendered Years Earlier
2. Adopt a Second Tier Pension Plan for New Hires
3. Reduce Compensated Absences
4. Discontinue Allowing Employees to Purchase Years of Service
City of Vallejo nears bankruptcy
February 20, 2008
NBC11 reports that, according to City Councilmembers, the City of Vallejo is on the brink of bankruptcy. In a report to the City Council last week, City Manager Joseph Tanner said the city faces a $10.1 million general fund operating deficit for the current fiscal year and a negative available fund balance of $5.9 million on June 30, 2008.
An emergency plan would cut city salaries to 5 percent lower than June 30, 2007 starting on March 28. Police and firefighter salaries under the existing labor agreements would be reduced 15 percent, by 8 percent for the electrical workers and 5 percent for confidential, management and un-represented employees.
Thirty general fund positions would be eliminated, 16 of which are currently filled and will require layoffs.
Other vacant positions could be filled by transferring employees but the reductions would reduce the general fund positions from 494 to 411, or by 17 percent. A single fire engine company would be closed each day on a rotating basis and there would be a three-month temporary reduction in truck company staffing from four to three.
What can we say…call your Congressman?
