Cities need reform, not bailouts

Here’s some excerpts from the great article, “Cities need reform, not bailouts”

The catastrophe for cities wasn’t created in the past few weeks….Our key point is that, in the years leading up to economic lockdown, these and other California officials have rubber-stamped pay hikes and pension benefits that their supporters, the public employee unions, demanded of them. Their government finances were unaffordable long before this disaster. The shutdown has only sped up the process of insolvency.

Consider the shameful example of Fullerton’s streets. These potholed relics would embarrass any American city. Such blight is incomprehensible in high-tax, relatively high-income Orange County — incomprehensible unless you understand that its union-backed political class consistently approves higher pay and benefits for government workers that suck up every available dollar, crowding out essential services.

The solution? If you’re Foley and Fitzgerald, first blame the virus for your predicament. Second, find someone to bail you out of your self-inflicted problems.

The authors go on to recommend chapter 9 bankruptcy.

Unlike California state judges, federal bankruptcy judges have shown a remarkable willingness to unwind the disastrous pensions that created havoc in city finances long before this current crisis.

That, of course, would require Foley and Fitzgerald to turn on the union leaders who financed their political campaigns in the expectation of a payback. Doing requires courage.

Let’s see if these officials have the heart to match their bold claim that they’re ready to fight for their communities.

Read the article in its entirety here

It looks like Chapter 9 could be the only way to shed the completely unsustainable pension and post-employment benefit liabilities Chico has. Here’s a great interview that offers solutions to this criminal situation including chapter 9 and also adopting reforms implemented in Wisconsin.

But I can guarantee you this will never happen in Chico because there is no one on the Chico City Council with the courage to stand up to the special interests. And anyone who did would never get elected. That’s the kind of community you live in, folks.

But you can vote and campaign against their sales tax increase! DON’T LET THEM TAKE EVEN MORE OF YOUR MONEY!

Sales Tax Increase Necessary to Save Bureaucrats’ Multi-Million Dollar Pensions

While your retirement investments implode in what is shaping up to be the worst economic downturn since the Great Depression, city bureaucrats expect YOU to pay higher taxes in order to save their multi-million dollar pensions.

Over the years tens of millions of dollars that should have gone for roads, infrastructure and other necessities has been siphoned off to CalPERS in a futile attempt to fund ridiculous and unaffordable pensions.

Recently the city experienced a surplus in excess of $3 million. What did they do with the money? They didn’t spend a penny of it on the roads and instead shipped $400,000 of it off to CalPERS for pensions. (See ) This is ON TOP of the money they already sent to CalPERS for the fiscal year!

In today’s ER city bureaucrat Constantin says the tax increase is “absolutely needed.” From the ER:

It’s likely, Constantin believes, that the city’s “most substantial needs” would be addressed.

It’s likely? He believes? Those are weasel words, folks. The ER goes on:

And yes, said Constantin, it could be used for pensions.


If you want to read the rest of Constantin’s drivel you can read it here

If voters are stupid enough to pass this tax increase it will only enable them to continue what they’ve been doing for many years.

You may never be able to afford to retire but the city council and Constantin believe you should pay MORE TAXES so city bureaucrats can retire as multi-millionaires! ARE YOU GOING TO LET THEM GET AWAY WITH THAT?


CARD Still Won’t Reform Its Unfunded Liabilities

While the markets are nosediving and already underfunded CalPERS is taking a big hit, CARD still refuses to reform its unaffordable pension and other post employment benefit liabilities. This despite the failure of Measure A.

Here’s what CARD board member and CalPERS six figure pension recipient Tom Lando had to say in today’s ER:

Even though we said — truthfully — that there’s a plan to pay off unfunded liabilities, people weren’t sure. Pensions are hanging over people’s heads.

Sure there is a plan. It is to do what they’ve been doing for years: divert millions of the taxpayer’s dollars that should go to maintenance, programs and new facilities to CalPERS so the pension gravy train can keep rolling. And that’s exactly what CARD will continue to do. And Measure A supporters blamed CARD’s unfunded liabilities on the state. That’s a lie. It wasn’t the state that approved CARD’s unaffordable employee compensation packages. It was CARD’s board.

And the ER article attributes the defeat of Measure A in part to “a robust anti-Measure A campaign.”

What a laugh. Yes, a handful of people wrote letters to the two local newspaper and a couple of people blogged against Measure A and there were some No on A signs but that was it. The ER article fails to mention that special interests poured over $64,000 to push through Measure A including $50,000 from the SIEU and $6,000 from board member and six figure CalPERS pension recipient Tom Lando.

CARD’s board and bureaucracy have no intention of ever reforming their unfunded liabilities. They expect taxpayers to continue to pay for unfordable pensions and other post employment benefits at the expense of park maintenance, programs and new facilities.

Had Measure A passed CARD’s board planned to spend two-thirds of the new tax money not on the parks and programs but on debt service. Of course CARD didn’t mention this in the ballot measure. Shouldn’t taxpayers have been told that before they passed a permanent and ever increasing tax?

And in addition to the over $64,000 from special interests that was raised, CARD spent 132,500 taxpayer dollars trying to get Measure A passed. THIS, THE DIVERSION OF MONEY TO CALPERS AND THE INTENTION OF SPENDING MOST OF THE NEW TAX ON DEBT SERVICE SHOWS WHAT TERRIBLE STEWARDS CARD AND ITS BUREAUCRACY ARE OF THE TAXPAYER’S MONEY.

CARD’s board and supporters deceived the public. Measure A was a fraud. The entire CARD board needs to go and Lando should be the first out the door, and the new board should get rid of CARD’s existing bureaucracy.

Measure L(ando) Goes Down to Defeat

The people within CARD’s taxing authority had the good sense to vote down Measure A. It was a bad tax that would have resulted in $36 million in new debt. It was regressive, permanent and two of every three dollars they would have taken from you would have gone to Wall Street for interest and fees. What a waste of money! And of course, the special interests backed it with over $64,000.

And this tax was proposed because like the City of Chico, CARD refuses to reform its unfunded liabilities. For years CARD has sent millions to CalPERS for its crazy pensions that should have gone for maintenance, programs and new facilities. And this is happening in large part because board members such as Tom Lando receive ever increasing six figure pensions. In fact, Lando put up $6,000 to pass Measure L(ando)! TALK ABOUT A CONFLICT OF INTEREST! THIS SHOULD BE ILLEGAL!

When it comes to unfunded liabilities the City of Chico is in far worse shape than CARD. And even if the voters are stupid enough to pass their sales tax increase they will still send tax money that should go for roads and other essentials to CalPERS so bureaucrats can retire in their fifties with pensions worth multi-millions and Cadillac health plans.


Sales Tax Increase Up Next

The tax increases will never stop as long as voters are stupid enough to pass them. After CARD’s property tax, up next is the city council raising the sales tax in Chico to 8.25%. This will be on the November ballot. And they use our tax dollars to sell it to us. Completely outrageous!

Here’s a letter to the Chico ER from last year about the sales tax increase.

Letters: Using your tax dollars to sell you a tax increase

By Letters to the Editor | February 25, 2019 at 9:27 p.m.

Why is there always enough money for huge pensions and raises for bureaucrats yet never enough money to maintain the streets?

And now our city council has decided there is enough money to give tens of thousand of dollars (and most likely more later) to a PR firm to sell us another bond tax or sales tax increase.  This doesn’t include the cost of the city bureaucracy’s staff time. Is this how you want your hard-earned tax dollars spent?

Whatever tax increase they sell you will be just a down payment as the city’s unfunded pension liability will only get worse.  Then the politicians will spend even more for tax increases.

As long-time political watchdog and journalist Dan Walters noted, politicians will not publicly say the money is needed for rising pension costs, but on the advice of high-priced consultants tell the public the money is needed for services.

Our community is in a state that has some of the highest taxes and living expenses in the nation.  Wages in Butte County are in the bottom 10 percent of the larger counties in the nation.  California has the highest poverty rate in the nation at 19% and Butte County’s is even worse at 21%.  It is unconscionable to increase this community’s tax burden while government pensions go unreformed.

It is long past time for politicians to spend within our means and represent us instead of special interests at our expense.

— Dave Howell, Chico

If you interested in fighting this nonsense please click the Contact button at the top of this page and leave your contact information.

Measure A Omissions, Half-Truths and Falsehoods

If Measure A passes CARD will take on $36 million in new debt and two of every three dollars of the new tax will be spent on debt service. CARD failed to mention this in the ballot measure. Don’t voters have a right to know this before they vote themselves a permanent tax that increases every year?

In his pro-Measure A argument in the Chico ER police officer Jim Parrott tells us the state, not CARD, created the unfunded liabilities. This is not only untrue, it’s absurd and it’s particularly disturbing coming from someone sworn to uphold the law and tell the truth. It wasn’t the State of California or CalPERS that approved the contracts that resulted in the unfunded liabilities. It was CARD’s board. And to this day the Chico ER has not set the record straight on Parrott’s untrue statement.

Moreover, one of CARD’s board members who put up $6,000 to pass Measure A receives a six figure pension from CalPERS and has every incentive to insure money that CARD should spend on maintenance, programs and new facilities continues to get diverted to CalPERS so CalPERS stays afloat. There ought to be a law that prevents such a conflict of interest.

Despite what CARD and its supporters state there is no guarantee how the money is spent. In the ballot measure no amount is dedicated to any project and CARD uses conditional words such as unless and intends.

It would be foolish for voters to approve a measure backed by over $60,0000 from special interests that would result in a regressive, permanent, perpetually increasing new tax and tens of millions in new debt from a governmental agency whose leaders and supporters do not tell voters the truth. And it’s shameful the local media does not set the record straight.

Stop CARD’s Measure A Tax!

Stop CARD’s new tax – Measure A! Click the link HERE to get the No On Measure A Flyer and distribute it to everyone you know! This flyer contains important information you NEED TO KNOW about this bad new tax.

And remember, this new tax does nothing to reform CARD’s unfunded liability problem so even if this measure passes CARD will be back for more tax increases and fee increases, especially with the large amount of new debt CARD will be taking on.

No On Measure A and the City’s Sales Tax Increase In Nov

CARD’s Measure A parcel tax is regressive, increases every year and has no sunset.  Shamelessly, CARD failed to mention in the ballot measure that it plans to take on $36 million in new debt if it passes, and two of every three dollars of this new tax will be spent on debt service.

Since 2013 CARD’s revenue has increased over 40%, yet CARD has failed to maintain its facilities and tells us it needs millions more every year from the community. For years money that should have been spent by CARD on maintenance, programs and new facilities was spent on spiraling employee costs, primarily pension and other post-employment benefits (OPEB). Incredibly, CARD uses this diversion of funds as justification for voter trust by stating in the voter information guide that it has an aggressive payment schedule for unfunded liabilities, and it does. For instance, last year CARD made an additional payment of $728,247 toward its CalPERS unfunded accrued liability. But CARD doesn’t mention that these additional payments are at the expense of everything else. One example is the closure of Shapiro Pool after it fell into disrepair.

CARD’s fiscal peril isn’t unique. Municipalities throughout the state face unsustainable pension and OPEB costs. (See ) The city of Chico is in even worse shape than CARD. The Chico City Council’s response is to put a sales tax increase on the November ballot that if passed will result in hundreds of millions in new debt.

Tax increases and more debt will only postpone the problem a few election cycles when more tax increases will be demanded. Scores of municipalities across the state raised taxes over the last decade, and some cities now have sales taxes over 10 percent. Even with tax increases and huge gains in financial markets over the last decade no municipality has solved its unfunded pension and OPEB liability problem. And when the next recession inevitably occurs and the markets tank the problem will be far worse.

The solution is to reform these liabilities, but special interests won’t tolerate that, which is why they have raised over $60,000 to pass the regressive, permanent, perpetually increasing tax that is Measure A and will burden us with tens of millions in new debt. Instead, we must stand up to special interests and demand reform. We can start by voting no on Measure A and the sales tax increase measure in November.

Every new local tax is a pension tax

And that includes Chico’s new taxes for 2020…and beyond.

Californians face a wave of local tax hike measures

The economy has been booming over the last decade, which has provided local governments with a windfall in sales and property taxes. Despite the economic fat times, California cities have been complaining about their dire economic straits, with some of them even fearing insolvency unless something is done to change the financial trajectory.

What explains this dichotomy? The answer is simple. The costs of public employee compensation, especially pension and retiree-medical benefits, continue to climb exponentially and are consuming ever-larger portions of local general-fund budgets. One need only look at the Transparent California website to get a sense of the eye-popping levels of pay and benefits.

Instead of addressing this well-documented problem, state and local leaders have relied on a tried-and-true method: asking local taxpayers to increase taxes on themselves. California voters will see the latest evidence of this at the ballot box during the March 3 primary. The California Taxpayers Association (CalTax) recently published a list of more than 230 tax increases that will be on local ballots.

Local governments and school districts always tout these measures as necessary expenditures to rebuild crumbling schools, maintain overused parks and provide better police services, but don’t be fooled. Every new local tax these days is, essentially, a pension tax. These governments write the ballot summaries and provide “voter information,” so they are able to sway the discussion away from the true causes of their fiscal peril.

Read the rest here