"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Wednesday, June 27, 2012

Coming Soon to a Municipality Near You....

The City of Stockton, California, today sought bankruptcy protection:

Salaries for current workers and benefits for them and former employees account for about 68 percent of the city’s general fund, the city said.

The city has cut services so much the last two years that “public safety is at a crisis level,” officials said in a June 5 fiscal report. Unemployment, at 15.4 percent in April, was almost double the national average according to the U.S. Department of Labor.

Stockton ranked third in murders last year among large California cities, behind Los Angeles and Oakland, according to FBI data.

The collapse of the housing market left Stockton to contend with mounting retiree health-care costs and eroding tax dollars in the wake of the recession, amid accounting errors that overstated municipal revenues. One in every 195 homes in Stockton’s metropolitan area received a foreclosure filing in May, the fifth-highest rate in the U.S.

Reading between the lines, you have highly-compensated public employees, both current and retired, living high on the hog off the tax dollars of an increasingly poor community with high unemployment, high crime, and a deteriorating housing market.    Sound familiar, America?   How about you, Detroit?   Sound familiar?   Chicago?   Milwaukee?   Anybody?


Update: Stockton's median household income is $45,730, well beneath the state average.   But, according to the WSJ, the city has "$800 million unfunded liability for pensions and retiree health benefits.... which are not pre-funded [and] are expected to grow by 7.5% annually for the foreseeable future. Pension costs are about 40% of what the city pays on worker salaries and are also growing. The average firefighter costs the city about $157,000 a year in pay and benefits and can retire at age 50 with a pension equal to 90% of his highest year's salary plus nearly free lifetime health benefits."

How exactly did anyone think that was a sustainable business model? 

More to the point, how did anyone think that was moral in a town as poor as Stockton?

No comments:

Post a Comment