OT: Municipal Financial Health?
san_jose_guy
money was invented for handing to women, but buying dances is a chump's game
OT: Calpers, the state retirement program.
I don't really understand all this.
https://en.wikipedia.org/wiki/CalPERS
San Jose has been in dire financial straights for a couple of decades now. Part of it is retirement costs. But in my view it is also Proposition 13, letting residential property prices separate from property taxes. And then also it is Re-Development, sucking up taxpayer money, and then putting it into things which largely generate private profit.
And usually the idea in Re-Development was that you could stimulate profits by making new buildings. But mostly all it amounted to was trying to run out poor people.
And then the idea was that you keep supplementing private interests on the idea that eventually the whole endeavor will go into black inc. Mostly it never did.
San Jose is more residential than industrial buildings, and prop 13 has taken a deeper long term hit. Some other cities in the other area are the opposite.
But now even many of the smaller cities are seeing budget projections going into the red in the coming years, and this is in Dougster's boom.
Some of it I guess is an increasing number of retirees per active municipal worker. I guess this means a stabilizing city gov't and population size, where as before it all ran on open ended growth.
Now there is also a longer life expectancy.
I have always laughed at Orange County, making their own mutual fund, and then when it collapsed in 1994, the county filed for bankruptcy. All funny money, all flim flam, all gov't going into neoliberal territory.
But now I see that the entire state's public pension program is something like this, depending on investment return, and being now below expectations, that being a big part of the problem.
Our whole society, committed to Dougster's speculation economy? Not good!
So when cities start to feel scared, they could try to cut back on services and costs, and as people say, "When you find yourself in a hole, the first thing to do is stop digging." And more often than not this is those on the Left.
And then the other way is the neoliberal way, "We need to find new sources of revenue." And so no it is not upper income taxes. Sometimes it is fees and other regressive taxes. But most of the time it is the city engaging in boosting , branding, "Capital of Silicon Valley", and in general promoting insanity. Usually there are multiple levels of anti-gravity upwards wealth siphons at work in it too.
Someone has written a book about this and usually it comes down to excessive city spending, promoting construction booms, and sometimes even putting public money into real estate bubbles.
And so some of the cities are going this way. Some is the legacy of the 2008 bust, but it is also these pension tightening problems, and then also the effects of this neoliberalism.
See, they get stuff built, by committing to continual boosting and continual growth. So people build stuff which is financially maginal at best, because they are expecting more things to be built which will let their project turn the corner. This is very risky.
In Texas in the 80's there was an over building of glass box office space. When this crashed the developers failed and then so did the lending institutions. Feds had to bail out account holders.
Remember Neil Bush and Silverado Savings and Loan?
Bill and Hillary Clinton and Whitewater Savings and Loan?
Charles Keating and the Senator from California Alan Cranston, and Lincoln Savings and Loan?
When you have this over building and it busts, then you have zero construction and the labor market clogs up with these jobless construction workers, and then you have a general collapse which can go on for a decade. The bigger the construction bubble, the longer and deeper the bust.
So to me,. construction binges do not seem like a good idea.
But some in local government see lots of empty retail buildings, and they figure that they can create retail jobs simply by making more empty buildings.
And it might look like it works, as the new developers do get tenants, but it looks like they are under pricing to get this. It is not just that they are under market. Rather, they are under their own breakeven prices. So the developer is still bleeding money.
And why would a supposedly competent developer do this? They do it because local government has convinced them that they are on their side and will keep boosting and keep the construction binge going.
These sorts are more the conservatives, or those on the Right. But what they are doing is very dangerous.
One guy said at a city council meeting, "Keep the new construction going, because that is how we all make money, and this is what we are all here for."
Well, I don't think most of the voters would agree with that. But the real estate industry would. And they exert lots of influence in cities. And so you find cities engaging in propaganda campaigns, insisting on trying to use taxpayer monies and taxpayer properties to try and influence the thinking of the taxpayers.
And then, starting to get some experience reading city budgets, we listen to them saying that the city will go into red ink in a few years, but they are still showing increasing FTE's ( full time equivalents ) and increasing budgets overall.
So let me say, that though I have looked at these sorts of things for a long time, much of it is still over my head, and I do not claim to understand that much of it.
****************************************
Let me say that in the organization I am building, these problems should be non-existent.
1. Outer order members pay us dues, they get lots of career advancement help, and their lifestyle expenses come way down, as they are getting unlimited free pussy. Otherwise their finances and ours do not touch.
2. Some people want money and power ( like ME ). We will help them start their own companies. Their money, their equity, but our services and expertise, and we make it work for them.
3. Some will go for the inner order. So long as they stay in, they get some spending money, but really they don't even need that. Work, Study, Get their Cock Sucked and Ridden, 365 days per year. What could be simpler?
Living communally where you don't need to keep up with the Jonses, is cheap.
Where as paying pensions for people to live market rate is very expensive.
And of course we will use whatever we have available as our Universal Health Care or Socialized Medicine. And we will fight for a 100% cradle to grave welfare state. But for ourselves we should have a radically better situation. We live communally, the inner order.
Those who opt to leave have stock in our companies. The women get 4x what the men do. But there is no guarantee and these are individual holdings. People get what they get.
But we hope most of the people stay, as then their shares go into a fund which builds are larger and fancier residence halls.
When you are communal, you don't have to buy your social legitimacy, and that plus the direct saving of communalism, plus our people's lifestyle differences and high level of education and intelligence are what make it work.
And again, we fight politically for a universal welfare state. But for ourselves, we should be doing extremely well anyway.
SJG
I don't really understand all this.
https://en.wikipedia.org/wiki/CalPERS
San Jose has been in dire financial straights for a couple of decades now. Part of it is retirement costs. But in my view it is also Proposition 13, letting residential property prices separate from property taxes. And then also it is Re-Development, sucking up taxpayer money, and then putting it into things which largely generate private profit.
And usually the idea in Re-Development was that you could stimulate profits by making new buildings. But mostly all it amounted to was trying to run out poor people.
And then the idea was that you keep supplementing private interests on the idea that eventually the whole endeavor will go into black inc. Mostly it never did.
San Jose is more residential than industrial buildings, and prop 13 has taken a deeper long term hit. Some other cities in the other area are the opposite.
But now even many of the smaller cities are seeing budget projections going into the red in the coming years, and this is in Dougster's boom.
Some of it I guess is an increasing number of retirees per active municipal worker. I guess this means a stabilizing city gov't and population size, where as before it all ran on open ended growth.
Now there is also a longer life expectancy.
I have always laughed at Orange County, making their own mutual fund, and then when it collapsed in 1994, the county filed for bankruptcy. All funny money, all flim flam, all gov't going into neoliberal territory.
But now I see that the entire state's public pension program is something like this, depending on investment return, and being now below expectations, that being a big part of the problem.
Our whole society, committed to Dougster's speculation economy? Not good!
So when cities start to feel scared, they could try to cut back on services and costs, and as people say, "When you find yourself in a hole, the first thing to do is stop digging." And more often than not this is those on the Left.
And then the other way is the neoliberal way, "We need to find new sources of revenue." And so no it is not upper income taxes. Sometimes it is fees and other regressive taxes. But most of the time it is the city engaging in boosting , branding, "Capital of Silicon Valley", and in general promoting insanity. Usually there are multiple levels of anti-gravity upwards wealth siphons at work in it too.
Someone has written a book about this and usually it comes down to excessive city spending, promoting construction booms, and sometimes even putting public money into real estate bubbles.
And so some of the cities are going this way. Some is the legacy of the 2008 bust, but it is also these pension tightening problems, and then also the effects of this neoliberalism.
See, they get stuff built, by committing to continual boosting and continual growth. So people build stuff which is financially maginal at best, because they are expecting more things to be built which will let their project turn the corner. This is very risky.
In Texas in the 80's there was an over building of glass box office space. When this crashed the developers failed and then so did the lending institutions. Feds had to bail out account holders.
Remember Neil Bush and Silverado Savings and Loan?
Bill and Hillary Clinton and Whitewater Savings and Loan?
Charles Keating and the Senator from California Alan Cranston, and Lincoln Savings and Loan?
When you have this over building and it busts, then you have zero construction and the labor market clogs up with these jobless construction workers, and then you have a general collapse which can go on for a decade. The bigger the construction bubble, the longer and deeper the bust.
So to me,. construction binges do not seem like a good idea.
But some in local government see lots of empty retail buildings, and they figure that they can create retail jobs simply by making more empty buildings.
And it might look like it works, as the new developers do get tenants, but it looks like they are under pricing to get this. It is not just that they are under market. Rather, they are under their own breakeven prices. So the developer is still bleeding money.
And why would a supposedly competent developer do this? They do it because local government has convinced them that they are on their side and will keep boosting and keep the construction binge going.
These sorts are more the conservatives, or those on the Right. But what they are doing is very dangerous.
One guy said at a city council meeting, "Keep the new construction going, because that is how we all make money, and this is what we are all here for."
Well, I don't think most of the voters would agree with that. But the real estate industry would. And they exert lots of influence in cities. And so you find cities engaging in propaganda campaigns, insisting on trying to use taxpayer monies and taxpayer properties to try and influence the thinking of the taxpayers.
And then, starting to get some experience reading city budgets, we listen to them saying that the city will go into red ink in a few years, but they are still showing increasing FTE's ( full time equivalents ) and increasing budgets overall.
So let me say, that though I have looked at these sorts of things for a long time, much of it is still over my head, and I do not claim to understand that much of it.
****************************************
Let me say that in the organization I am building, these problems should be non-existent.
1. Outer order members pay us dues, they get lots of career advancement help, and their lifestyle expenses come way down, as they are getting unlimited free pussy. Otherwise their finances and ours do not touch.
2. Some people want money and power ( like ME ). We will help them start their own companies. Their money, their equity, but our services and expertise, and we make it work for them.
3. Some will go for the inner order. So long as they stay in, they get some spending money, but really they don't even need that. Work, Study, Get their Cock Sucked and Ridden, 365 days per year. What could be simpler?
Living communally where you don't need to keep up with the Jonses, is cheap.
Where as paying pensions for people to live market rate is very expensive.
And of course we will use whatever we have available as our Universal Health Care or Socialized Medicine. And we will fight for a 100% cradle to grave welfare state. But for ourselves we should have a radically better situation. We live communally, the inner order.
Those who opt to leave have stock in our companies. The women get 4x what the men do. But there is no guarantee and these are individual holdings. People get what they get.
But we hope most of the people stay, as then their shares go into a fund which builds are larger and fancier residence halls.
When you are communal, you don't have to buy your social legitimacy, and that plus the direct saving of communalism, plus our people's lifestyle differences and high level of education and intelligence are what make it work.
And again, we fight politically for a universal welfare state. But for ourselves, we should be doing extremely well anyway.
SJG
Got something to say?
Start your own discussion
12 comments
http://www.remappingdebate.org/article/l…
SJG
http://www.remappingdebate.org/about
SJG
The risk of default is low due to simple economics. Unless it becomes a ghost town, taxation will increase demands on the citizens. The pension obligations will be passed onto the tax payers, as most of the guarantees backed by the pensions are written into State statutes.
I think much of what you're stating above SJG is a red herring, either confusing g the reader to stay on point, or your attempt at garnering a certain political angle, albeit a weak one at that.
As an investor I would study the finances of the municipalities' reserves, along with their public revenue streams. After that I would either decide to
go forward or not. My faith in certain agencies are stronger than others, and all of these agencies have ratings on their financial stability in their bonds. Sorry but only a sucker would play the chumps game without doing their due Dillingence. It's basic finance 101.
"What could explain these contradictions? Remapping Debate’s intensive two-month investigation has found that this isolation is, in significant measure, the story of the inadequacies of the neoliberal model, even when applied to a wealthy region and city. San Jose has been dedicated foremost to fomenting business growth and wealth creation on the assumption that broadly shared prosperity would follow. That promise of shared prosperity has not been delivered."
"San Jose’s ongoing attempt to pay for its budget deficits with the pensions of its workers is only the latest round in this pattern of upward redistribution. The attempted pension cuts follow other, post-recession austerity measures: San Jose now employs about 1,300 fewer workers than it did before the crash, and spends about 15 percent less per city resident."
"The revenue problem in San Jose is an old one. For decades, the city has been incapable of capturing enough of the vast wealth created in the region to sustain its burgeoning population. After World War II, San Jose exploded in size, pursuing a growth strategy that left it bloated with residential development yet short on industry. It became a massive suburb for the rest of the Valley. Then the national tax revolt kicked off in California in 1978 with Proposition 13, which permanently cut property taxes to the bone and made it extraordinarily difficult for local governments to raise revenues of any sort. California’s tax revolt augured the anti-urban politics of the Reagan years, which saw a substantial cut in federal money available to cities."
"Instead, San Jose responded to the tax revolt and federal cutbacks by casting itself explicitly as an entrepreneurial venture. Its paramount mission from the 1980s on was to attract and retain business investment—to facilitate the creation and growth of wealth. To this end, the city engaged in decades of high-cost, high-risk subsidies designed to attract business and its attendant class of creatives and upscale consumers. The subsidies went in two directions: large industrial parks mostly in the north, and a gleaming new downtown of office towers and luxury hotels."
SJG
KING CRIMSON - EPITAPH (GREG LAKE VOCALS)
https://www.youtube.com/watch?v=bfgD3LJ6…
In return, politicians protect union jobs, provide generous salaries and benefits.
The most generous benefit is rich pensions, where the true cost and funding can be hidden for decades.
However, the bill is now finally coming due for most of these municipal pensions. The cost is so horrendous that there is no longer any tax increase, bonding, or actuarial assumption which can keep the house of cards from collapsing. Even the unions realize this.
I read the budgets and muni pay scales., I know who gets what. But the truth is, even if the money were much higher, I still would not want one of those kinds of jobs. I'm just not that sort. Maybe a cop or a DA, but otherwise no. I want to do my own stuff, and often that involves serious conflicts. I want to do other types of things.
But if you like the pay or pensions, go for it yourself.
Government employment, pensions, and benefits, is what props up the middle of the jobs market. With out that, the jobs market would collapse.
Mark, are you in Calif? Arguments like yours are what were used to take down Gray Davis. He served in Vietnam. Arnold Schwarzenegger made action movies.
Dougster, can you help me out here with this?
SJG
Try A Little Tenderness
https://www.youtube.com/watch?v=UnPMoAb4…
Awesome Live
https://www.youtube.com/watch?v=IQ9n2_5m…
http://www.remappingdebate.org/article/l…
SJG
"By and large, the winners have been corporate interests, chief among them real estate developers, large commercial landowners, and tech corporations. Indeed, to the extent that there has been regional coordination in the Valley, it has been spearheaded by and molded to the benefit of the business class.
The entrepreneurial approach to local governance, of which Silicon Valley was an early adopter, is now the national norm. Increasingly, cities, regions, and states compete for mobile capital in a desperate game of tax incentive and subsidy one-upmanship that turns local and state governments into supplicants and runs the risk of leaving them starved."
"Meanwhile, metro areas around the country have dedicated themselves to trying to emulate the Valley’s success. Places like Austin and Raleigh and even New York are seduced by Silicon Valley as economic metaphor, a sure-fire machine for the production of wealth. But Silicon Valley the place, that patch of land south of the San Francisco Bay between the Santa Cruz Mountains and the Diablo Range, is an object lesson in the downside of entrepreneurial government. The winnings have been uneven and the costs have been great. And within the Valley, San Jose has come to bear many of these costs: a prolonged fiscal crisis, a rapidly eroding middle class, and a disproportionate and concentrated share of the growing underclass that characterizes today’s economy."
SJG
http://www.remappingdebate.org/article/d…
Talks about the most recent previous SJ Mayor Chuck Reed and the "Pension Reform" issue, and things like 1978 Prop 13 which have choked off public sector revenue.
Now the other cities are starting to feel the same things which San Jose has been.
SJG
Viva Maria! soundtrack
https://youtu.be/b02xyrwm2ts?list=PLb7oZ…
Last of the Czars
https://youtu.be/mYo8SEvnsrM?list=PL6oJq…
http://www.remappingdebate.org/article/d…
Deep-rooted dysfunction
http://www.remappingdebate.org/article/d…
The delusions of an American Technopolis
http://www.remappingdebate.org/node/2205
"San Jose in this era was an extreme version of what urban scholars call a growth machine: a coalition of government, developers, and real estate interests pursuing the shared goal of intensifying land use and raising property values."
http://www.remappingdebate.org/article/d…
"The McEnery administration took large swaths of agricultural land in northern San Jose and, creatively stretching the intended legislative definition, declared them “blighted.” This brought them under the purview of the redevelopment agency, which leveled the farmland and subsidized the construction of expansive industrial parks. In another inventive legal maneuver that pushed the boundaries of redevelopment, McEnery then diverted the revenues generated by this new industrial tax base into his one true ambition: revitalizing San Jose’s downtown. The postwar decades of breakneck suburbanization had drawn the life out of the city’s small but bustling center. McEnery, who grew up downtown and whose family had several commercial holdings there, had watched the neighborhood waste away. He resented Dutch Hamann’s growth machine, so he set about creating his own."
This valley is their valley
http://www.remappingdebate.org/node/2206
"In certain ways, Silicon Valley has followed a common pattern, one not unlike the failure of intra-regional cooperation that (as Remapping Debate has reported in the past) contributed heavily to the downfall of Detroit. “The functional economic unit is the regional economy,” said Chris Benner, the professor of regional development at UC Davis. “But there are these separate cities. And the resources of that economic unit are not available equally to those who are living within it.”"
FWIW, I recognized early on that Silicon Valley was another Detroit in the making.
Forging a different path
http://www.remappingdebate.org/node/2217
"But there is plenty that could be done to move toward a system less characterized by social Darwinism..."
"The temptation to play the business incentive game has become deeply embedded in local and state decision-making, so much so that the offering of incentives seems more like a reflex than a considered decision."
"“Our modest proposal is to use federal dollars as a kind of carrot to get the states to quit raiding each other actively,” LeRoy said, referring to job-poaching campaigns of the Rick Perry variety (which are common well beyond Texas)."
"Sam Liccardo, a San Jose city councilmember who is also running for mayor, offered a characteristic view. While Liccardo has strongly supported the mayor’s efforts to cut worker pensions, he also agrees that the city does not bring in enough revenue. He would thus, in principle, like to see the tax structure reformed in some way — yet this simply isn’t something that is talked about."
"LeRoy of Good Jobs First described a part of the problem as “anxious politicians trying to look aggressive on the economy in a time of prolonged high unemployment.” Many such officials, LeRoy said, “feel trapped in a game whose rules they never would have written. They sort of feel like they’ve got to do it because everybody else is doing it. But they don’t like it, and they understand how distorted their perspective has been by the way the game plays out from their side of the table before the conversation even happens.”"
"...substantial change required to address the immediate needs of a city like San Jose. Chief among them is the state’s Proposition 13–based tax structure, whereby enormous corporations pay decades-old rates for their commercial lands. It is precisely such change that local officials like Liccardo are unwilling to demand for fear of losing business to places like Texas."
"The current practice of providing incentives reflexively, important in and of itself, is also a signal of a deeper compliance. “The money winds up standing in for how accommodating the bureaucracy is going to be,” said Nari Rhee, the urbanist and labor scholar formerly at the University of California, Berkeley. This, in turn, is an expression of the notion that local governments are duty-bound to cater to the needs of the corporate sector. “That notion is so generalized and insidious,” Rhee said. “Everyone seems to have internalized that this is the way it works.”"
SJG
Spike in San Jose homeless deaths
http://www.ktvu.com/news/spike-in-deaths…
Ford Class
http://www.thefordclass.com/cvn78/index.…
See the dry docks.
Use zoom outs and changing back to maps to see where this is.
Newport News Shipbuilding
https://www.google.com/maps/place/Newpor…
Huffy
http://www.divinesecretsofadomesticdiva.…
Here is a hilarious movie about a Rev. Ike sort of a character:
http://www.imdb.com/title/tt0065579/
They show some of it here, watch how he drives into town in a Rolls followed by an armored car to hold the money.
https://www.youtube.com/watch?v=Vq5wk9Lx…
https://www.pleaserusa.com/ProductDetail…
https://www.pleaserusa.com/ProductDetail…
Sophisticated Lady - Duke Ellington
https://www.youtube.com/watch?v=brqxEdws…
https://www.youtube.com/watch?v=aJVACQHI…
This has a really interesting melody and harmony. There are fusion jazz versions of this, and they are instantly recognizable, even without the lyrics. This version makes a pleasant change to the lyrics. To my ear, they must have some sort of pickup and amplification on the wood bass, order to get more sustain.
https://www.youtube.com/watch?v=-wc957do…
More Patty Austin
https://www.youtube.com/watch?v=mpLziRhp…