The San Bruno Beacon

The laws of economics, while not as quickly absolute as the laws of physics, are nonetheless almost as predictable and damaging. As the production of hard goods leaves the United States to find new homes in China, India, Eastern Europe, and other countries, where workforces are better trained and more cost competitive, the US economy loses strength.

First the production jobs disappear, then the government and private sector service jobs disappear. The damage becomes immediately evident. We have seen cities right here in California where there are so many home foreclosures that many formerly thriving neighborhoods have become ghost towns. Now, we are being told that the City of Vallejo is on the brink of bankruptcy.

Vallejo may become California's first city to declare bankruptcy as payouts to retiring police and fire employees drain needed cash from the City. In Vallejo's case, it appears that the City's public employees are putting the City at risk for bankruptcy. In the words of Vallejo City Councilmember Stephanie Gomes, "We've been spending more than we've been making for 20 years and it's time to pay the piper".

In Vallejo, not unlike San Bruno, approximately 80% of the City's general fund is consumed by employee related costs. The City of San Bruno has also been spending more than it has been taking in for many years and, not unlike the City of Vallejo, may also on the fast track to economic collapse if the City of San Bruno does not immediately reduce its spending and balance its budget. In addition, the City of San Bruno has a Redevelopment Agency that has drained millions of dollars away from the City treasury. It has been my long held opinion that San Bruno's City Manager and Council are a financial wrecking crew that is destroying San Bruno.

In San Bruno, our current economic problems have been exacerbated by the fact that there has been a disconnect between government and economic reality. To help stop the fiscal insanity that is destroying San Bruno's City government we must devise a system attaching personal financial liability to all government employees and elected officials who make decisions about the way the City of San Bruno manages and spends taxpayer dollars. For example:

In terms of City employee time and actual tax dollars spent concocting and advancing the failed Measure F scheme, that would have destroyed San Bruno's sales tax base, San Bruno's City Manager and Council may have spent hundreds of thousands of taxpayers dollars. It is the height of stupidity for a deficit ridden city like San Bruno to spend hundreds of thousands of taxpayer dollars in an attempt to trash the City's sales tax base. That being said, let's imagine that every Member of the San Bruno City Council and City Manager had personally financial liability for Measure F if it lost. What's a few hundred thousand dollars split 6 ways? In this type of put up or shut up scenario, I think these deficit makers would have shut up and not put Measure F on the Ballot. More about this plan later.

The other reason why California cities like Vallejo and San Bruno risk bankruptcy is that the unions representing local government workers appear to think that pay raises, increases in benefits, and huge lifetime pensions are something their members are automatically entitled to no matter what the state of the economy is. It is as if these public sector unions think that taxpayer money comes from some magic tax fairy in the sky with an endless supply of money?

The purpose of a union is to help insure that jobs paying good salaries and offering decent benefits and working conditions are available for qualified union members. The most anti-union people are those people who are so irresponsible in their planning and actions that they cause union members to lose their jobs, benefits, and retirement plans by allowing the union to price rank and file union members out of the job market. We saw this in the auto, steel, and maritime industries and we are now seeing this in this in the public employee sector as public employee unions also price their members out of the job market. It's a game of musical chairs. If you are a rank and file union member who gets laid off, you lose, no bigger salary and no big benefits. If you are a union member who gets to keep your job with more salary and benefits. You win. Unfortunately, in the recession-depression scenario we are now operating in, there will be far fewer winners than losers.

Rank and file union members in the public sector, who value their jobs, would be well advised to urge their their union leaders not to price them out of the job market with unrealistic demands that result in fewer jobs. More public sector jobs and public employee pensions will be put at risk with no taxpayer bailout as the California economy sinks deeper into a recession and quite possibly falls into a depression.

I predicted a recession during the Measure F campaign last year when most people were saying that we would avoid a recession. The recession is now here. Ongoing recessions turn into depressions. Right now, the State of California is on the brink of falling into a depression as the real estate bubble continues to deflate while more people and jobs leave the State in search of more tax friendly environments.