Judy Nadler, senior fellow in government ethics at the Markkula Center for Applied Ethics, looks at ethical dilemmas, scandals, and best practices in government.
The following postings have been filtered by tag California budget
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Thursday, Jul. 12, 2012 12:34 PM
There is a stigma about declaring personal bankruptcy, but it does not compare with the reputation that comes to a city that goes bankrupt. Ask the mayor of San Bernardino, the latest California city to file for Chapter 9 bankruptcy protection. As of this week, the city of 211,000 found it had just $150,000 in the bank. According to the Los Angeles Times, “The city barely scraped together enough money to cover its June payroll.”
Uncertain economic times are impacting local government to a degree that we have not seen in the past. Vallejo, a Bay Area city, declared bankruptcy in May 2008; Stockton did the same last month. Cities large and small are vulnerable. Earlier this month Mammoth Lakes, a resort town of 7,392 filed bankruptcy papers, in part because they could not pay a $43 million court judgment.
While costs of providing city services and employee benefits have skyrocketed, the slow economy and decline in real estate values have contributed to the $45 million shortfall in San Bernardino.
An “exit route” would not be possible without recent state legislation that changed bankruptcy law. The move was prompted by the 1994 bankruptcy of Orange County, the largest county in the United States to go bankrupt.
The results of declaring bankruptcy include drastic reductions in police and fire protection, layoffs, and severe cuts in basic services such as parks, libraries, and road repairs. While it is easy to blame the financial problems on the pension programs (many are unfunded or underfunded), there is no benefit at this point to place the blame on any one factor. In some cases, the loss of redevelopment funds and the inability to pay off bonds are determining factors. And because any tax increases must be passed by the voters (one provision of Proposition 13), cites are unable to keep revenues in line with expenditures.
Is this the tip of the bankruptcy iceberg? Michael Coleman, a fiscal advisor for the League of California Cities admits there may be more cities facing this option in the future, but predicts some will able to weather the storm. As for the others, Coleman says. “Some cities may not go into bankruptcy, but they may dissolve. They may cease to exist.”
- Should cities have the right to declare bankruptcy?
- The law dictates how creditors are to be treated. What ethical obligation do cities have to their employees in times of fiscal collapse?
Thursday, Jun. 16, 2011 4:00 PM
As the Rolling Stones say, “You can’t always get what you want.”
That is certainly the theme in Sacramento and cities across California as the state budget passed both houses by the June 15 deadline. But nobody was happy with the document, and Governor Jerry Brown promptly signed a veto.
Arguing that there would be no gimmicks in eliminating the state deficit, Brown said the document “ continues big deficits for years to come and adds billions of dollars of new debt. It also contains legally questionable maneuvers, costly borrowing, and unrealistic savings. We can—and must—do better.”
The $26 billion deficit has created friction between the Democrats and Republicans, with Governor Brown trying to reason with both sides. In the end, he criticized Republicans for refusing an important part of his plan: to let the voters have a say in how the balance will be achieved.
Brown wanted voters to decide on extending personal income and sales tax increases, a provision the Republicans would concede only if proposals such as a spending cap were included, along with reforms in both pension and regulatory programs.
This is the first time in 25 years the California lawmakers have been able to meet their constitutional deadline, but it may have been rushed due to a proposition passed last November that said: no budget on time, no paycheck. The voters will undoubtedly be unhappy with one concession by the governor that allows legislators to continue to be paid. Previously, State Controller John Chiang said he would permanently withhold lawmakers' pay and per diem starting June 16 if they did not pass a balanced budget.
So for now the Golden State will have to rely on another song from the Rolling Stones that laments, “I can’t get no satisfaction.”
Photo by freedom to marryavailable under a Creative Commons Attribution-Non-Commercial License.
Tuesday, May. 10, 2011 10:16 AM
California teachers have declared a “State of Emergency,” marching on the state capitol to lobby for a tax extension to preserve school funding.
Although the rally drew some 1,000 teachers and their supporters, only sixty-five people were arrested when they refused to leave the Capitol rotunda after the building closed for the day.
College students and parents, also concerned about the proposed cuts to education, joined the teachers. Many expressed frustration that “corporate greed and politics” have made educators the “scapegoats” in the current wave of criticism of public employee salaries and benefits.
According to California Teachers Association president David A. Sanchez, “It’s not right that the rich and big businesses don’t pay their fair share of taxes.”
Protesting with signs like “Tax the rich” is not as effective as face-to-face meetings with legislators from both parties. It is easier to ignore a noisy crowd outside your building than it is to ignore a constituent in your office. Especially when just last week the country celebrated “National Teachers Appreciation Week.”
Thursday, Mar. 10, 2011 12:01 PM
Did you ever wonder what happens to mayors and council members when they leave office? In California, with term limits impacting the number of years that elected officials may serve in office, many politicians look for a higher office.
A study by the League of California Cities shows that many local government officials continue in service, moving up to the state level. In fact, more than 50% of the members of the California legislature have local government roots. In the 2011–2012 legislative year, there are at least 22 members from local government serving in the state Senate, and 42 members from local government serving in the Assembly. Some have come from city councils; others have served as county supervisors.
Dealing with barking dogs, use permits, land-use decisions, and the other day-to-day trials of local government, these individuals come to the new positions armed with invaluable experience. Given the state of the economy, and the budget constraints all levels of government are feeling, the true test of these public servants will be their ability to tackle statewide problems and still remember their local roots.
Friday, Feb. 18, 2011 3:09 PM
How much are we willing to pay for open and transparent government?
In California, the governor is suggesting cuts to the state budget that would end the funding given to local government for posting public notice of meetings
. This advance notification is part of the state’s open meeting requirements, designed to allow community input on items to be voted on by governing bodies. Public officials who violate the provisions, found in the Ralph M. Brown Act, face misdemeanor charges and may go before the local ethics commission.
The cuts are estimated to save $63 million the state owes for claims dating back to 2004. There are additional mandates that are also on the chopping block. According to a finance spokesman for the state “this wasn’t an effort to single out the Brown Act in any way, shape or form. We proposed suspension of all state mandates that weren’t involved with either public safety or property tax.”
In a time when every item in every budget is critical, we should not be cutting back on measures to ensure citizen input and transparent decision making.
Wednesday, Feb. 2, 2011 10:20 AM
I’m writing this while “attending” the government realignment hearings at the state capitol in Sacramento. I can be in my office and also in Sacramento thanks to a live Webcast
from The California Channel.
This video-on-demand site is funded by California cable television providers, and bills itself as “your streaming source for politcs and public affairs that shape California.”
Archived materials, such as Governor Jerry Brown’s State of the State address are available, along with subcommittee hearings, discussion from the Senate floor, interviews with legislative leaders, and more.
This kind of access to state government can provide the public and the media details about the budget shortfall that are essential to financial recovery in California. It's a great model worth replicating.
Monday, Jan. 24, 2011 3:26 PM
Fiscal triage is underway in cities and counties across the country. The economy remains sluggish, unemployment is high, and the cost of providing basic services continues to rise.
Does this sound familiar? It's the same song we've heard for at least five years, but now there seems to be more truth in the lyrics. The naysayers, pundits, candidates, and officeholders have all tried to fix our budget shortfalls without actually making substantial changes. That is no longer the case.
In California, Governor Jerry Brown is not only trimming "extras" like government-issued cell phones, fleet vehicles. and a variety of agencies, he is taking a close look at redevelopment agencies. These agencies, established in cities and counties throughout the state are allowed to shift their property taxes from schools and other needs in order to dedicate the money to "blighted areas." Cities argue a redevelopment agency (RDA) stimulates job growth and improves property values, and the League of California Ciies is mounting oppostion to the proposal.
Each redevelopment comes with a staff, so John Chiang, state controller, is also looking at salares in the 18 RDAs he has targeted for review.
As painful as Brown's proposed cuts are (they include higher education, social services, and the like) they are necessary --unless voters support higher taxes.
When the nurse is ready to give a shot it is usually with the warning" "this is going to hurt." Californians should consider themselves forwarned.
Friday, Jan. 21, 2011 4:06 PM
California's Governor Jerry Brown has declared a "fiscal crisis" in the state, and has proposed some tough cuts to address the deficit. But cities across the state are rallying to object to a plan to eliminate redevelopment agencies, long considered an economic development tool.
Regardless of what fix the governor and legislature enact, it will not address the long-term problems. In a poll taken by Western City magazine, published by the League of California Cities, respondents were asked "What would you like to see the legislature accomplish this year?"
Not surprisingly, 72 percent of the respondents said they were looking for a long-term vision for the state, one that would address structural problems "without deferring problem items to future years."
Wednesday, Jan. 12, 2011 5:22 PM
Street sweeping or homework centers? Skate park or senior center? Retirement incentives or layoffs?
As the streetsweeper came by my house this morning I was wondering how long it will be before this service is cut from the budget. Now it is a weekly service, but I know of some cities that don't sweep the streets anymore because there is not enough money.
California's new governor has been looking for all kinds of places to cut costs -- from fleet vehicles to cell phones. Cities are likewise examining each and every program, and trying to balance a mixture of vital services (police and fire) with very important programs (water treatment plant and upkeep of streets and sidewalks) with the kinds of things that make a community llivable -- good schools, clean parks, well-stocked libraries, and the like. (It could be argued that all of these are vital to a well-rounded community.)
If you were given a list of all the services your city povides, along with the cost of each and asked to balance those costs against the city's revenue, what would you choose? Would you cut services or increase taxes? Both? Share your thoughts by commenting on this post. It will be interesting to see how the citizens prioritize spending.
Friday, Nov. 12, 2010 3:24 PM
According to the dictionary, a "lame duck" is one that falls behind the rest of the flock, or is weak. Today we use the phrase to describe an elected official holding office during the months between the election and the swearing in of a successor.
But as termed-out Governor Arnold Schwarzenegger demonstrated this week, a transition period need not be wasted.
The governor is calling an emergency session of the incoming legislature -- the individuals who will be responsible for solving California's $25.4 billion shortfall.
The new legislators will take office December 6, giving Schwarzenegger a limited window of opportunity before Jerry Brown becomes governor.
By declaring a "fiscal emergency" and convening the special session, Schwarzenegger is proving that there is no reason to be a "lame duck," even if the press describes you as such.