by CalWatchdog Staff | April 1, 2013 6:15 am
April 1, 2013
By Chris Reed
If you had to fashion a nut graph to explain why so many local California governments are in deep fiscal trouble, here’s my nominee for an honest generic overview:
Over the past 20 years, the city/county/district’s political leaders have often acceded to union demands for higher benefits and pay, including retroactive increases in pension formulas and automatic annual raises typically granted just for accumulating years on the job. When the economy is strong and revenues increase, the policies are costly but sustainable. When the economy is weak and revenues level off or fall, the city/county/district is forced to reduce services or fight with powerful unions to impose layoffs. This often leads to budget gimmicks and/or questionable uses of bond funds — policies that protect public employees’ interests over the public’s.
Here’s a boiled-down version of the usual generic overview from California’s mass of mediocre journalists:
It’s the fault of the failing private-sector economy. It didn’t create enough tax revenue to keep the status quo going.
So now we have San Bernardino’s bankruptcy unfolding — with big court decisions possible this year — and which journalistic outlet is doing the best job at giving a comprehensive, smart analysis of what’s going on, one that doesn’t buy the lazy dishonesty of overview no. 2?
Oddly enough, it’s Reuters, the international wire service that generally hasn’t particularly shined in its U.S. coverage.
This is from a March 19 story:
“LOS ANGELES, March 19 (Reuters) — The bankrupt city of San Bernardino, California, approved over $1 million in pay increases for police and firefighters despite claims it can barely make payroll, let alone afford the salary hikes.
“Monday night’s pay increases, for a city that appears before a federal judge again this week to plead for bankruptcy protection, are a result of its charter. It mandates that pay for safety workers must be tied to salary levels for 10 similar-sized California cities, all of which are wealthier than San Bernardino.
“The bankruptcy of the city 65 miles east of Los Angeles is a national test case on whether the pensions of government workers take precedence over other payments in a municipal bankruptcy. It is a high-stakes issue for pension plans and their beneficiaries, and for Wall Street bondholders who lend money to governments.
“Moves to have the city charter overturned, so the city can set its own pay levels, have failed to get the majority needed on the city council in the past year.”
This if from a Feb. 12 story:
“RIVERSIDE, Calif., Feb 12 (Reuters) — San Bernardino’s police and firefighters unions will ask a judge later this week to let them sue the bankrupt city over pay and benefit cuts, arguing that officials have abused bankruptcy laws to impose concessions on safety workers.
“A lawyer for the city’s police union, Ron Oliner, on Tuesday told the federal judge overseeing the case, Meredith Jury, that after recent cuts to police pay, pension benefits and staffing levels, morale in the force was at a ‘low ebb’ and they had no alternative but to try to sue the city in state court.
“An attorney for the stricken city’s firefighters union, Corey Glave, said they would do the same, in coordination with the police union.
“The large and growing burden of public pension debt, in addition to salaries and overtime — particularly for San Bernardino’s safety workers — has become a prominent issue in the city’s bankruptcy as it seeks to cut costs.”
This is from Reuters’ magnum opus, a Nov. 13, 2012, story that dug up all the bodies:
“The city’s decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America’s largest state. San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.
“Little by little, over many years, the salaries and retirement benefits of San Bernardino’s city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.
“Unions poured money into city council elections, and the city council poured money into union pay and pensions. The California Public Employees’ Retirement System (Calpers), which manages pension plans for San Bernardino and many other cities, encouraged ever-sweeter benefits. Investment bankers sold clever bond deals to pay for them. Meanwhile, state law made it impossible to raise local property taxes and difficult to boost any other kind.
“No single deal or decision involving benefits and wages over the years killed the city. But cumulatively, they built a pension-fueled financial time-bomb that finally exploded.
“In bankrupt San Bernardino, a third of the city’s 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension. Forty-six retired city employees receive over $100,000 a year in pensions.
“Almost 75 percent of the city’s general fund is now spent solely on the police and fire departments, according to a Reuters analysis of city bankruptcy documents — most of that on wages and pension costs.”
Have you ever seen anything in the L.A. Times as succinct as the Reuters’ copy quoted above in the Times’ coverage of California’s various local and state fiscal meltdowns?
Nope. The fish rots from the head down. Instead, you see Sacramento bureau chief man Evan Halper use the rhetorical tricks of a Democratic propagandist in writing about budget policies. And you have the incomparably compromised Sacramento columnist George Skelton, both the embodiment and the tool of the state’s intertwined political/media establishment, writing that he’s never met anyone who didn’t think higher taxes were the answer to California’s woes.
Too bad Reuters doesn’t cover Sacramento with the vigor it covers San Bernardino.
Source URL: https://calwatchdog.com/2013/04/01/reuters-bests-state-media-at-covering-san-bernardinos-collapse/
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