CA still worst run state in the nation; Sacramento’s stadium obesssion

CA still worst run state in the nation; Sacramento’s stadium obesssion

For the third year in a row, California has been named the worst-run state in America, by 24/7 Wall Street. Is it any wonder? With at least 10 California cities on the verge of municipal bankruptcy, a $24 billion budget shortfall in 2012, including a mid-year shortfall of $930 million and $8.2 billion carried over from the year before, California is a mess.

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“California carries an A credit rating from Standard & Poor’s, and an A1 from Moody’s — both worse than any other state except for Illinois. Explaining its rating, Moody’s pointed to the state’s history of one-time solutions to resolve its budgetary gaps,” 24/7 Wall Street reported in The Best and Worst Run States in America: A Survey of All 50 – 24/7 Wall St. “It also noted the state’s “highly volatile revenue structure,” due to its over reliance on wealthy taxpayers. The Golden State was also among the worst states in the nation for educational attainment, health coverage, and unemployment.”

Yet, this latest report from 24/7 Wall Street is contrary to many stories in the media about California’s “recovery.”

Gov. Jerry Brown’s crack public relations team has been hard at work convincing the rest of the country that he has sparked a California turnaround. The New Republic even recommended to President Obama that, in his second term, he should “study the Moonbeam” for help cleaning up the growing list of government scandals and repair the economy.

“Many of the best-run states in the nation benefit from an abundance of natural resources. North Dakota, Wyoming, Alaska, and Texas, among the best-run states, are all among the states with the greatest concentration of GDP in the mining industry, which includes activities such as oil and natural gas extraction, as well as coal mining,” 24/7 Wall Street reported.

California isn’t benefitting much at all from its vast and abundant natural resources. The state is openly hostile to oil fracturing, even though tracking could turn the state around economically.

And the city of Sacramento, the State Capitol, is losing businesses large and small. Instead, the city council and Mayor think building a new sports arena is the golden ticket.

Sacramento: shiny object syndrome

Sacramento is a city with a bad attitude problem. It has a proverbial chip on its shoulder, made worse by Mayor Kevin Johnson, who has insisted since being elected in 2008, Sacramento isn’t worth a hoot unless it builds a new sports arena — preferably paid for by taxpayers.

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Johnson and arena proponents want Sacramento residents to keep their eyes on the shiny object, and ignore the city’s $2.250 billion debt. Sacramento is a city with an annual general fund of only $370 million.

According to Eye on Sacramento, a public policy watchdog, the arena deal is a $350 million immediate subsidy, plus interest on the projected $255 million arena bonds. This amounts to $450 to $500 million over a 35-year period. Total taxpayer cost: $800 to 850 million, depending on the interest rate at which the arena bonds are issued.

The cost could be higher if long-term municipal bond rates continue their recent sharp increase.  Interest costs will be exacerbated by the fact that bond payments in the first 8 years will be interest-only “teaser payments” and not a dime of principal will be paid until the 9th year of the bond.

It’s a potential city killer, particularly when you consider that almost all NBA arenas require a $100M rehab within 10 years and become functionally obsolete after 18 years —  which will be 17 years before the 35-year arena bonds will be paid off.

A nice place to live

This is a shame because Sacramento need not aspire to be San Francisco, Los Angeles, Phoenix or Portland. Sacramento is a very nice place to live.

However, decades of mostly liberal politicians have turned Sacramento into an attention-seeking entitlement child, desperate for “World-Class City” designation, with Mayor Johnson leading this charge.

But politicians and city officials are missing the boat — what constitutes “world class” in a city is not just size, but geographic location, music, art, culture, universities, churches, bodies of water, architecture, restaurants, even a zoo.

We don’t need a billion dollar sports stadium to define the personality and amenities of Sacramento; we have all of those amenities, and Sacramento is located on two rivers – the Sacramento River, and the American River.

“A sports stadium is optional for cities lacking other features,” said Harvey Mansfield, a professor of government at Harvard, in a Forbes article.

World class cities are not created with sports teams, and Sacramento is no different. Sacramento already has so many amenities, which the politicians and apologists ignore.

Sacramento hasn’t even capitalized on its unique characteristics. Sitting on two rivers, one would have thought that development along those beautiful waterways would have been a priority. Instead, we have homeless camps along the rivers.

In March 2012, City Councilman Kevin McCarty, a current State Assembly hopeful, even shared his concerns: “The arena deal is the largest financial transaction in the city in years. We are the most broke city in the region.”

4 comments

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  1. Rex the Wonderdog!
    Rex the Wonderdog! 25 November, 2013, 22:47

    For the third year in a row, California has been named the worst-run state in America, by 24/7 Wall Street. Is it any wonder? With at least 10 California cities on the verge of municipal bankruptcy, a $24 billion budget shortfall in 2012, including a mid-year shortfall of $930 million and $8.2 billion carried over from the year before, California is a mess

    Katie, get your head out of the sand, didn’t you hear, CA has a budget surplus, so the logical thing to do is give out huge pay increases-like with BART- retroactively raise pensions! I mean, what could POSSIBLY go wrong? Good times never end in CA

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  2. Dennis
    Dennis 26 November, 2013, 08:47

    California is the worst managed state in the union, the least attractive state to do business in (for eight years in a row) and educationally we are ranked 49th in the nation, one spot above Mississippi. Exactly, what could possibly go wrong here in Utopia? We continue to elect super liberals who are totally out of touch with the main stream and spend public monies that they don’t have at a rate that would make a drunken sailor look like a fiscal conservative. Now King Kevin and his constituents are pushing for a PUBLICLY FUNDED arena in downtown Sacramento and the only parking available in the facility will be for players and VIP’s! Rex, you are absolutely correct, good times NEVER end in Commiefornia.

    Reply this comment
  3. Queeg
    Queeg 26 November, 2013, 21:06

    Things will get better. If not call my boss Ulysses Uhaul for your moving kit and discount chits.

    Always have specials on Chinese packing Supplies.

    Reply this comment
  4. Othello Johnson
    Othello Johnson 1 February, 2014, 14:38

    The drought is caused by The Hight Priest of the world in Solidarity against Gov. Brown and all the states unions in Solidarity against AwoGbade. He is a shaman from Sacramento California who created a crime prevention youth program that Ex. Gov. Choose as his personal legacy program. Multiple murder attempts were made on this innocent High Priest and his father was murdered on Jan.5th 2013. The high pressure system blocking rain in Pacific Ocean are the Ancestors spirits in Solidarity against the injustice of Gov. Brown and police/corrections union and the denial of civil rights to AwoGbade over last 8 year period. This is only the start to what the Myans forecast. Since 12-12-12. The date Union members in Californias Department Of Justice tracked Awogbade and hitmen inserted Aids blood into him. No Justice No Water! It’s only starting in California. Without a thorough FBI investigation into Yeshua Awogbade court case in Sacramento…the forces of nature will wipe Americas Slate Clean. Mayor Kevin Johnson Molestation coverup is at the center of this Drama…

    Reply this comment

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