stockton BK, here we come

[bearishgurl]

…Since 2009, Stockton has cut $90 million from its budget, she said. The city has reduced its police force by 25%, its fire department by 30% and other city jobs by 40% but has not been able to get itself financially stable. And then, said Johnston, there was the housing bust…

http://www.cnn.com/2012/06/27/business/california-stockton-bankruptcy/index.html?hpt=hp_t2

The $64M question here is, “How much (needless) hiring did the City have to do (both sworn and non-sworn) SINCE its “1990’s era” contracts with its unions were hammered out for wages and benefits, pensions and retiree health subsidies?”

The $128M question here is, “Why did the City feel they had to do that much hiring??”

(Don’t ask the questions if you don’t already know the answer ;=))

Stockton’s ills are simply a repeat of Chula Vista’s, who now has roughly the same population. Chula Vista grew by about 60,000 new housing units during the millenium boom in the exact same way that Stockton did but has already massively laid off over two years ago. HOWEVER, Chula Vista is coastal, 4-9 miles from the int’l border and the western portion is 10-13 miles from dtn SD, one of CA’s major cities and job centers.

Stockton is an inland agricultural city and doesn’t have the same (more versatile) characteristics of Chula Vista. When a young “transplanted” Stockton family’s main breadwinner loses their employment (which was already likely 60+ miles away), they’re toast and have to relocate. In Chula Vista, this is NOT so. Most have established family nearby, some with family on both sides of the border and a much larger, closer and more diverse job market to choose from.

The sad legacy that we are left with in both cities (as well as many more in CA) is LESS employees to serve many THOUSANDS MORE residents.

Mello-Roos Bonds do NOT pay the wages, benefits and retirements of the city/county workers who are obliged by law to serve the residents of CFD’s who pay them. The bonds can ONLY be used for infrastructure and to fund schools.

The councils of BOTH these cities were VERY short-sighted when they made these backroom deals with developers to form the CFDs. They had stars in their eyes and all they could see was the teeter-fund residuals from new property tax coffers. It is now patently obvious that they gave no thought to HOW MANY MORE EMPLOYEES it would take to service their city if it grew by 100%+ over 5-8 years! In addition, did anyone in power in Stockton have ANY IDEA where all these new homeowners would WORK?? Did they think they would be able to pay their PITI and annual MR cleaning feedlots? Or even supervising the cleaning of feedlots?? LOL …

Gas is nearly $5 gal in SF and the peninsula and a little less than that in the east bay. Even a Lawrence Livermore Lab worker (35-40 mi one-way) living in Stockton would have to fill up 2-4 times per week in order to live in “cheap” Stockton and work in Livermore.

What were they thinking??? The answer is, they weren’t :=0

[Allan from Fallbrook]

[quote=briansd1]A good budget fix for everyone would be to lower health care costs to 10% of GDP (from the current 18%) and implement a zero tolerance for obesity.

Allow employers to fire people who are obese. That will force people to control their weight (and health care costs) if they wish to keep their jobs.[/quote]

Brian: Dude, really? Substitute “black” or “gay” for “obese” and let’s see how well that works, shall we?

You CANNOT legislate good behavior and the Leftist goal in terms of the perfectibility of human nature will never be realized.

LIBERTY IS THE FREEDOM FROM COERCION.

[Allan from Fallbrook]

[quote=bearishgurl][quote=Allan from Fallbrook]Well, it’s official: http://www.cnn.com/2012/06/27/business/california-stockton-bankruptcy/index.html?hpt=hp_t2%5B/quote%5D

I’m really sorry to see this. As a child, the grain elevator view of Stockton and smell of feedlots there represented to me the Capitol of a vast agricultural foodbasket for the entire nation. It was a proud city.

I think before pointing the finger at public employees and unions, one would do well to actually examine their list of creditors. As soon as it is available on PACER, I will do so.[/quote]

BG: I remember travel/exhibition games to Modesto, Stockton, Fresno and (gasp!) Yuba City when I was a kid playing Pony League. Growing up in Santa Clara County, these places represented a side of California I had never seen before. I remember a spoof soap opera with Carol Burnett called “Fresno”, where the tagline was, “The Power. The Passion. The Produce!” I knew about the agricultural side of California, I just hadn’t seen it before. It was a powerful reminder of how truly diverse California used to be, in terms of industry and productivity.

Of course, I also remember the GM plant in Fremont and when there were Navy bases at Treasure Island, Mare Island and Vallejo. Days gone by…

[Allan from Fallbrook]

[quote=bearishgurl]
I think before pointing the finger at public employees and unions, one would do well to actually examine their list of creditors. As soon as it is available on PACER, I will do so.[/quote]

BG: You raise a fair and valid point (as CAR did as well.) This isn’t a one-sided issue (meaning we cannot lay the blame solely at the feet of the public sector unions.) We also need to evaluate the impact, in terms of lost revenue, of Prop 13 and the “boom and bust” style of budgeting the State of California uses (and the impact becomes glaringly apparent when you juxtapose the revenues present during the run-up to the dot.bomb bust versus those following), as this budgeting is heavily skewed in terms of dependency on the state’s huge earners.

There is plenty of blame to go around. However, we’re also out of time. We need to focus on fixing the problem, versus fixing the blame.

[UCGal]

[quote=Allan from Fallbrook]I remember a spoof soap opera with Carol Burnett called “Fresno”, where the tagline was, “The Power. The Passion. The Produce!” [/quote]

That was an AWESOME mini-series spoof of falcon crest/dynasty/etc. It was totally hilarious.

[Coronita]

http://finance.yahoo.com/news/stockton-california-becomes-largest-u-012204537.html

[CA renter]

[quote=flu]http://finance.yahoo.com/news/stockton-california-becomes-largest-u-012204537.html[/quote]

From the link, the reason why they had to file BK:

“Stockton has suffered a sharp drop in revenue since the collapse of its once red-hot housing market, forcing it to cut more than $90 million in spending in recent years.

The housing boom transformed the farming city into a distant bedroom community of the San Francisco Bay area, and the bust put it at, or near, the top of national foreclosure rankings in recent years.”

……….

^^^This^^^ (not “union goons”) is the reason most municipalities are in such big trouble.

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