by Kelly Brothers on June 11, 2012
Have you read the book “Boomerang: Travels in the NEW Third World” by Michael Lewis? It’s a collection of anecdotes that illustrate the dysfunction of state-run finances in places like Iceland, Greece, Ireland…and California. Not only does the book include California, but it saves the Golden State for last, making our state and municipal finances look even more dysfunctional than Greece!
Well … just maybe…we are turning a corner. Perhaps when we look back at the sad disintegration of our fiscal finance, we will view June 1, 2012 as the nadir of the crisis. Last week we witnessed the embarrassing revelation that the building purchased by Stockton to be its City Hall had been taken back by the bank. CITY HALL - REPOSSESSED! That is low.
But this week, we began to see signs that voters are taking notice and doing the dirty work their elected representatives have refused to do. Voters in San Diego and San Jose voted overwhelmingly to cut retirement benefits for city workers. Unions will scream and file lawsuits, but voters have finally said they are tired of lousy roads, closed pools and compromised public safety. Pension contributions now make up 25-30 percent of the general fund budget, squeezing out jobs and essential services.
In this environment, why is there even a discussion about whether or not civic employees should pay their share of their pension obligation?
It is still ugly and there will be more bankruptcies of cities and counties. Perhaps we will look back on June 2012 as the month in which California hit bottom and decided we’re tired of being embarrassed by the politicians who have taken this state to the brink of insolvency.
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