The Government Panic

Can you hear that? Close your eyes. Listen close.

I’m not certain, but I’m pretty sure it’s the sound of government bean counters shrieking.

Governments are always trying to push a pig through a small hose. There’s always a deficit. There’s always a volley and then the budgets get put to bed and no one ever really knows how the crisis was handled. But there’s something different happening now. There’s a palpable realism buttressing some of the news lately. Over the past few days, we’ve been treated to a host of revelations about the poor shape of local municipalities’ finances. Some have been more subtle than others.

The loudest shriek actually came several weeks ago when the mayor warned of a steep drop in revenue and a $43 million gap between what the city planned to spend for the last few months of the year and the amount of revenue that is actually going to come in.

Since then, we’ve gotten other indications that people are really worried in a way that’s unprecedented in recent times. Did you not notice, for instance, County Supervisor Greg Cox’s quiet disclosure — during the cacophony of Election Day no less — that he and his colleagues would be cutting off their $10 million slush fund distributions this year?

This is nothing short of shocking. Hundreds of organizations around town of various merit just lost thousands of dollars they’ve gotten for years — doled out by individual supervisors like kings demanding tribute.

Done. Outsky. Dried up (at least for now). Unbelievable. Cox undoubtedly is looking at next year’s budget numbers and getting a little antsy. He clearly does not want to have anything to do with the recrimination that would come if he tried to cut services but also tried to maintain the stream of funds they send to their favorite nonprofits around town.

These are the funds that have made Supervisor Pam Slater-Price an opera star and sent her colleague, Ron Roberts, to China. All the supervisors enjoy immense gratitude when they hand out the money to all kinds of groups — from those refurbishing ball parks in the East County, to those run mobile health clinics. Make no mistake, for the supervisors to forego this privilege, there must be something ugly in their books.

There’ s more. In case you missed it, check out Kelly Bennett‘s story from the other day. Local cities get a big part of their revenue from sales taxes and a big part of the rest from property taxes. All of the officials she talked to from North County to South are worried.

Now we have the pension system back in the news. Again, it was never the health of the pension system that was the worry. What worried us was how much it cost to keep it healthy. And it’s one thing to have declining revenue — it’s another, quite troubling, thing to see costs rise at the same time. That’s exactly what we’re talking about here. If the value of the city’s pension system plummets, and stays down, we’ll have to pay more each year from the city’s budget to keep the system healthy.

That would be fine if, say, there was a ton of money coming in from, say, a mania in the housing market.

Yeah. This is going to be a rough ride.

— SCOTT LEWIS