It’s a sure thing that next year’s deficits will be even worse, even in reasonably well-run cities.
Most economists, and city officials for that matter, know our economic troubles today are not cyclical phenomena with recovery just around the corner.
Fundamental changes must take place so we can rebuild our economies in the new reality of global competition. Fundamental changes must take place in how we define work and the good life.
Yet, resistance to change runs deep. We all want what we’ve had.
The ongoing fights by communities across the state to reduce public employee costs and preserve their redevelopment agency slush funds are illustrative of the backward-looking mindset, futile efforts to preserve the past in a changing world.
Public employees have become a privileged class, their pensions and benefits protected by law, while private-sector workers have seen pensions eliminated entirely, even as their share of health-care costs rise.
Officials are reluctant to lay off city workers because they mean loss of services to a public that has come to expect so much from government, so they keep looking for short-term fixes just to get through the next 12 months.
It is a downward spiral. Like so many companies that have failed, they are chasing declining numbers downhill with no end in sight.
On the revenue side, local governments have become addicted to using millions of dollars in redevelopment money siphoned from their own general funds and schools to buy jobs, especially retail jobs that will generate sales tax revenues.
The trouble is shops are closing; whole sectors, like bookstores, are disappearing. People are shopping online and usually not even having to pay sales tax.
To a great extent, Burbank and Glendale thrived on luring entertainment companies and shoppers from the big city next door. They are the real “Hollywood” today.
But in a declining and changing economy, it is a zero-sum game.
Los Angeles recently gave $5 million to a developer to build an office building in Hollywood to attract entertainment companies to leave Burbank and Glendale. No new jobs are created by such competition. No new houses sold. No new cars bought. People simply change their commuting route.
These games go on all the time with tens of millions of public dollars being given away without improving the regional economy.
There are some positive signs that officials are beginning to think and act regionally. The Valley Economic Alliance and the new San Fernando Valley Council of Governments are examples of cities starting to work together for mutual benefit.
We have a long way to go, and there are many obstacles.
The cost of providing government services must be reduced, and the talents of our people need to be brought together to take advantage of the economic opportunities to develop “green” industries and manufacture products for export.
It’s asking a lot of government, of workers, of civic leaders to break with the patterns of the past and to embrace innovation.
It means taking a step back financially for public employees, and it means paying a little more in taxes for everyone else in the short term. But things will only get worse if we continue down the road we are on.
RON KAYE can be reached at firstname.lastname@example.org. Share your thoughts and stories with him.