Tags: Money | National Debt | calif. | city | shortfall

Taxpayers Stuck With Bill for Spendthrift San Francisco

Image: Taxpayers Stuck With Bill for Spendthrift San Francisco
In 2009, San Francisco State University students, faculty, and staff rallied against budget cuts to the San Francisco public education system in front of City Hall. (AP Photo/Jeff Chiu)

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Tuesday, 21 Mar 2017 09:24 AM Current | Bio | Archive

Ballotpedia has some interesting figures regarding San Francisco, California.

As of 2014, it had a city budget of almost $8 billion and was the second highest spender per capita ($9,433 per resident) in the United States.

Baghdad on the Bay boasts an unemployment rate of 3.2 percent and the typical home sells for north of $1 million.

Yet with all that revenue and all that wealth Bloomberg finds the city will be facing a budget shortfall of $848 million in five short years.

The culprit? A combination of politicians buying re-election and public employee unions charging all the traffic will bear for those same endorsements.

The unholy alliance means increases in "pension payments and other payroll costs are driving the gap."

Bloomberg found that even with the advantages of hosting a tech boom, "San Francisco’s net pension liability — a key measure of how much retirement benefits exceed the assets set aside to cover them —  more than doubled to $5.5 billion in the year ended in June due to lagging investment returns and an update to assumptions, including longer lifespans for retirees."

Faced with that daunting prospect, a private sector employer would start looking for ways to cut payroll costs.

But that’s not what happened in San Francisco city hall. Instead the politicians increased the size of the payroll by 17 percent when they added an additional 4,519 city employees since fiscal 2011.

As City Controller Ben Rosenfield explained, "We’re definitely a service-rich government." Which is another way of explaining feather-bedding on the public dime.

This is what happens when politicians "negotiate" with public employee unions.

Politicians can anticipate getting the endorsement of the unions with the votes the endorsement carries if the negotiations are successful.

While the extra costs imposed on the city by generous pensions will become the problem of some future city council.

Union bosses get re-elected to their positions when they land a lucrative contract for their members. These contracts include perks, cost of living adjustments and pension calculators that are often much more lucrative than those found in the private sector.

But the people who foot the bill, the taxpaying public, aren’t represented at the table, even though they are stuck with the check.

That’s one reason state and local governments across the country are short approximately $2 trillion when it comes to cover future retirement benefits.

In San Francisco contributions to the San Francisco Employees’ Retirement System will jump 36 percent by 2022 and that increase is at a rate three times faster than the city’s revenue is projected to increase.

The mayor’s office claims to want to leave the city’s fiscal house in order when the mayor leaves office, but you can bet that will involve more than a little disarray in your house when the tax bill arrives.

Michael Reagan, the eldest son of President Reagan, is a Newsmax TV analyst. A syndicated columnist and author, he chairs The Reagan Legacy Foundation. Michael is an in-demand speaker with Premiere speaker’s bureau. Read more reports from Michael Reagan — Go Here Now.

© Mike Reagan

 
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Reagan
In San Francisco, Calif. unemployment is 3.2 percent. A typical home sells for $1 million plus. With all that revenue and wealth, the city faces a budget shortfall of $848 million. The taxpayers footing the bill aren’t represented at the table. They're just stuck with the check.
calif., city, shortfall
508
2017-24-21
Tuesday, 21 Mar 2017 09:24 AM
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