Friday, May 09, 2008

Irony Is Often Stark in Local Government Politics

In a single day of news, it is amazing to see the contradictions that are omnipresent in local government politics.

While the US Senate is getting set to seriously debate mandatory collective bargaining legislation HR980/S2123, which would compel states and cities and towns to enter into collective bargaining arrangements for local public safety employees, we are also seeing news out of Vallejo, California, where this city of 117,000 people is soon to become California's largest city to file for Chapter 9 bankruptcy.

So where is the irony? Well, one of the major contributing factors for the decision to file bankruptcy is a $16 Million shortfall in funds that is largely attributed to overly generous pay and benefits packages that have been foisted on the city through collective bargaining arrangements with various public safety employee groups. It was reported in the San Francisco Chronicle that nearly 75%-80% of Vallejo's general fund is spent on public safety (Police and Firefighter) compensation and benefits packages.

Article Excerpt:
Many officials and residents attribute Vallejo's fiscal troubles to overly generous pay and benefits to the city's police and firefighters. The salaries for police and firefighters currently take up 75 to 80 percent of the city's general fund.

Representatives from police, fire and electrical workers unions all argued against the Chapter 9 bankruptcy protection, saying that doing so would only make hiring already short-staffed public safety agencies even harder.

While California cities, and Vallejo in particular, are not all too similar to many Utah cities in regard to financing and available financing tools, it should be noted that Utah cities and towns are also seeing continuous increases in the cost of employee compensation and benefits.

So, is any Utah City on the verge of bankruptcy? Unequivocally -- NO, but we too need to be worried about the threats that such congressional action could impose on Utah's ability to pay for employees, while also taking care of the day-to-day needs of city residents (trash pickup, pot hole repair, water, sewer, etc.)

While we may not be dealing with widespread collective bargaining in Utah, there is one thing that we do have in common with California cities and that is dependence upon a strong economy to provide the required tax revenue to provide local government services. As has been witnessed in Vallejo, a weakening housing market and slowing retail sales have further exacerbated the budget problems in this suburb of San Francisco. As we start to see a "cooling economy", the last thing we need is to see Congress add additional costs for the general, day-t0-day operation of a city or town.

If you haven't contacted Senator Hatch or Bennett already, please do so today to ensure that they too see the irony of this legislation.

Until next time... Enjoy