City Journal has a fine column by Steven Malanga which explains how California has been brought to the brink of economic collapse.
The Cliff Notes summary is this: A triumvirate of greedy unions (teachers, SEIU, and public safety workers) have managed to buy enormous influence in the California state legislature and have thwarted almost all attempts at reforming the enormous salaries and pensions they have inveigled from the taxpayers of the state. In order to pay these contractual obligations municipalities have raised taxes which has in turn driven businesses out of the state thus depleting the tax base. Meanwhile, the unions still gorge themselves at the public trough.
Here's a taste:
Only too late have Californians recognized the true magnitude of their fiscal problems, including a $21 billion deficit by mid-2009 that forced the state to issue IOUs when it temporarily ran out of cash. In the municipal bond market, fears are rising that the Golden State could actually default on its debt.
Municipalities around the state are also buckling under massive labor costs. One city, Vallejo, has already filed for bankruptcy to get out from under onerous employee salaries and pension obligations. (To stop other cities from going this route, unions are promoting a new law to make it harder for municipalities to declare bankruptcy.) Other local California governments, big and small, are nearing disaster.
The city of Orange, with a budget of just $88 million in 2009, spent $13 million of it on pensions and expects that figure to rise to $23 million in just three years. Contra Costa's pension costs rose from $70 million in 2000 to $200 million by the end of the decade, producing a budget crisis. Los Angeles, where payroll constitutes nearly half the city's $7 billion budget, faces budget shortfalls of hundreds of millions of dollars next year, projected to grow to $1 billion annually in several years. In October 2007, even as it was clear that the area's housing economy was crashing, city officials had handed out 23 percent raises over a five-year period to workers.
There are lessons to be gleaned from all this, not the least of which is that modern liberalism, the ideology in which public employee unions are marinated, is totally hostile to the economic well-being of the people who pay their salaries. One gets the distinct impression from Malanga's essay that virtually every ill that afflicts California was aided and abetted by liberal Democrats and their union masters.
Read the article and catch a preview of the peril much of the rest of the country will find itself struggling to escape over the next decade.
RLC
