On Monday, April 6 the Huntington Beach City Council voted to increase pay for its police officers and city employees. The cost for these raises over the next three years is estimated at $5 million. In a city that reported general revenues of $188 million in the fiscal year ended June 2019, this raise can accurately be described as...
Editor’s Note: The following was originally published on Reason. In terms of providing quality information that researchers, hospitals, public health officials, and taxpayers would find the most useful, the best portals are offered by San Diego, Santa Clara, San Mateo and Marin counties. County governments across California are providing an array of public coronavirus data...
The city of Lindsay, in Tulare County, is California’s fourth highest risk city according to the California state auditor. And that was before the COVID-19 pandemic. Its fiscal condition will likely deteriorate further as residents shelter at home, raising the specter of sharp service cuts or even Chapter 9 bankruptcy for the city. The mistakes...
Black Swan: an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.” – Investopedia For decades there have been so-called “permabears” claiming that investment returns in the stock market were unsustainable. When the internet bubble popped in 1999, the permabears felt vindicated. But then, starting around 2003, the...
In a perfect world, California’s state and local public employees would receive exactly the same retirement benefits as federal employees. They would receive a modest defined benefit, a contributory 401K, and they would participate in Social Security. Unfortunately, in California, while some state and local public employees are offered 401Ks, and many participate in Social Security, all of...
The economic crisis arising from the public health crisis we now face shows why the state auditor was correct in calling out El Cerrito and several other California cities for their perilous financial positions during a decade of economic growth. While El Cerrito may have been able to “get away” with uncontrolled spending during good...
The specter of California’s cities and counties becoming insolvent is nothing new. Three major California cities have already declared bankruptcy, Vallejo in 2008, Stockton and San Bernardino in 2012. In October 2019, the California State Auditor’s Office reported on the fiscal health of 471 California cities. On what the California State Auditor’s office describes as a “Local Government...
Now that financial markets around the world are experiencing a long-overdue correction, the best we can hope for is that we hit bottom before a deflationary cascade causes a worldwide depression. Those economists who believe in the long-term debt cycle may claim that this time the end has arrived, and they may be right. COVID-19, oil price...
Welcome to the Hotel California, such a lovely place… Plenty of room at the Hotel California, any time of year, you can find it here… – “Hotel California,” by the Eagles, 1977 For decades California’s aristocracy has engaged in unsustainable feasting, as they consume the leviathan carcasses of what were for a time the world’s the...
The preliminary election returns reported on March 4th indicate that California’s voters delivered a stunning rejection of new taxes and borrowing. It’s about time. At the state level, Prop.13 which would have authorized $15 billion in general obligation bonds for schools and colleges, required a simple majority for approval. But as of March 9th the...
The American Conservative recently laid an egg. They published a misanthropic, pessimistically aggressive Malthusian screed, written by James Howard Kunstler. Kunstler’s “Why America’s Urban Dreams Went Wrong” attacks pretty much every urban amenity Americans have built since the invention of the automobile. And his reasoning, all of it, reflects a dismal lack of faith in human...
Anyone unfamiliar with what is really going on in California would have listened to Governor Newsom’s State of the State address on February 12 and gotten the impression that things have never been better. Newsom’s opening set the tone for the rest of his 4,400 word monologue: “By every traditional measure, the state of our state is...
“It’s not enough. We’re still 41st in the nation in per pupil funding. Something needs to change. We need to have an honest conversation about how we fund our schools at a state and local level,” – California Governor Gavin Newsom, State of the State Address, February 12, 2020 It should come as no surprise that Governor...
When Gov. Jerry Brown left office in January 2019, most of the reviews of his second eight-year stint as leader of the nation’s richest, most populous state were effusive. Citing his restoration of fiscal stability after the Capitol chaos seen in the last three years of the Schwarzenegger administration, Brown biographer Narda Zacchino declared he...