One of my first official duties in this capacity was to cover Speaker Karen Bass’ press conference. Towards the end of her talk, she laid it on the line.
“I think that some of my colleagues on both sides of the aisle are in denial, frankly. And feel that this problem is not as big as $11 billion right now or $28 billion over the next few months, or feel that we can solve this through cuts alone or that we can solve this through revenue alone. The goal of today is to make sure that there is no excuse for the denial of moving forward. I’m saying that on both sides of the aisle, in both houses, and I’m also saying that for the new members especially who come here with wonderful ideals that they need to hear the reality. For returning members, they need to know how much more serious this crisis has gotten.”
Yolo County Budget Crisis
The local dominoes fell shortly after that. The county faces a $3.5 million budget shortfall this year and a stunning $18.6 million deficit next year. That represents almost one third of the general fund budget.
From Wednesday’s Woodland Daily Democrat:
“The Board of Supervisors approved cost-saving measures Tuesday that would close at least $3.2 million of Yolo County’s current $3.5 million budget shortfall.
The board also directed staff to return in early 2009 with recommendations for resolving next year’s $18.6 million deficit, which represents 30 percent of the general fund. The 2009-10 budget covers the period beginning July 1, 2009 through June 30, 2010.
The shortfall is likely to increase as the national recession continues and with the state’s ongoing financial challenges, county staff reported to the board. The state’s current deficit is $28 billion over the next 18 months, with shortfalls projected for the next four years, according to staff.
To shrink the county’s current $3.5 million deficit — the result of a “carry-forward” shortfall from department budgets of the previous year — the supervisors adopted staff recommended measures that includes the freezing of “unnecessary travel,” elimination of non-essential contracts and services, and postponement of some equipment purchases.
The board also authorized staff to implement department-identified savings measures that amount to about $2.2 million; accept voluntary employee salary reductions at a savings of $210,280; and negotiate with labor representatives for mandatory 32-hour furloughs of each employee, saving $585,949 ($271,814 from the general fund).”
The city was the next to fall that evening.
The Vanguard reported:
“At last night’s Davis City Council Meeting, the city of Davis was presented data by Finance Director Paul Navazio that paints an increasingly bleak face on the city’s fiscal situation. Once thought to be relatively immune to the rise and fall of the economy, the current economic crisis goes deep enough that Davis faces a $1.2 million budget deficit for this year and a $3 million budget deficit for next year.
The culprit is lower-than-expected property and sales tax revenues. For instance, the city expected a 6.5 percent growth in property taxes but they have only seen a 3 percent growth. Moreover, and just as devastating is what happened on the sales tax side where the city typically assumes a 2 percent annual sales tax growth but instead is looking at a 5 percent decrease in revenue from sales tax primarily coming from auto sales, gas, and restaurants.
A few weeks ago we reported that the city of Davis was looking for immediate cost containment which included a five-fold strategy of a hiring freeze, closer scrutiny of overtime, travel and training control, tighter control of contracts, and a limitation of non-essential spending.
The budget forecast for the next five years looks bleak for the city. With the $1.2 million debt for 2008-09 increasing to $3 million next year, $3.8 million in 2010-11, $4.49 million in 2011-12 and $5 million for 2012-13. Part of the problem is that the structural deficit that some have claimed the city resolved, has asserted itself.”
DJUSD Budget Crisis
The good news for the school district, if there is good news is that with the passage of Measure W, it looks like the school district will be alright, albeit eating into the reserves for this year. The bad news is that after that, the picture once again gets the bleak. The culprit is the devastating budget situation in the state.
The governor’s proposal features roughly a $2.2 billion cut in K-12 funding. THe Democrats feature a $1.8 billion K-12 reduction.
The bad news is that the huge operating shortfalls right now are projected to continue for the next five years.
The key question is how does DJUSD look after the governor’s proposal.
According to Budget Director Bruce Colby’s presentation last night, the district faces a $1.8 million deficit for 2009-10. Because of some of the categorical fund flexibility in the governor’s proposal, DJUSD might be able to shift some of that money around to trafer from state categorical revenues. The district receives about $4.8 million from this. Mr. Colby presents this as a two year option. The district can also reduce or eliminate mandatory class size reductions, this is also a two year option. Finally, as one-time relief, the district can reduce the required reserve level, which would be a 50% reduction or one million dollars.
However, the larger budget deficit challenge will be for 2010-2011. The good news (again if there is any) is that since the district is okay for now, they can focus on longer term strategies for reduction of spending. For those wondering, another parcel tax is not a possibility.
The slide below here is the comparison between the Governor’s proposal and the Democratic proposal.
Bruce Colby argues that the final state budget reductions will have significant impacts on DJUSD programs for the next four years. They are going to look to ways to minimize future spending decision in order to maintain a fund balance. They will review and reduce site and district level spending including on categoricals. They will also evauate the need to backfill vacant positions.
One thing that was stressed was the need for community outreach and to discuss with the public and inform them about this process. They are proposing a board budget workshop in early 2009.
As I said at the onset of this article, this is one of the most bleak pictures I have seen in terms of the economy and honestly, I think Speaker Karen Bass had it right–not only are her colleagues in denial, but the public as a whole is really unaware at this point how bad things will get. The real bad news is that this is just the beginning, the country really has not felt the full impact of this economic collapse. Things are likely to get much worse before they get better.
—David M. Greenwald reporting
First off, Congrats on the editorial position with the California Business Report. I’m sure you will do a fine job.
There are people who foresaw how bad things would get but we were always laughed at. The unwinding of leverage will be painful for all, even for us folks who had planned for it. I suppose no one is laughing any more.
My one hope is that this will draw communities closer. The initial adjustment period will be rough and a lot of people here who favor social activism anywhere but in their neighborhood will be in for a hard and cold awakening.
First off, Congrats on the editorial position with the California Business Report. I’m sure you will do a fine job.
There are people who foresaw how bad things would get but we were always laughed at. The unwinding of leverage will be painful for all, even for us folks who had planned for it. I suppose no one is laughing any more.
My one hope is that this will draw communities closer. The initial adjustment period will be rough and a lot of people here who favor social activism anywhere but in their neighborhood will be in for a hard and cold awakening.
First off, Congrats on the editorial position with the California Business Report. I’m sure you will do a fine job.
There are people who foresaw how bad things would get but we were always laughed at. The unwinding of leverage will be painful for all, even for us folks who had planned for it. I suppose no one is laughing any more.
My one hope is that this will draw communities closer. The initial adjustment period will be rough and a lot of people here who favor social activism anywhere but in their neighborhood will be in for a hard and cold awakening.
First off, Congrats on the editorial position with the California Business Report. I’m sure you will do a fine job.
There are people who foresaw how bad things would get but we were always laughed at. The unwinding of leverage will be painful for all, even for us folks who had planned for it. I suppose no one is laughing any more.
My one hope is that this will draw communities closer. The initial adjustment period will be rough and a lot of people here who favor social activism anywhere but in their neighborhood will be in for a hard and cold awakening.
David,
Well Done, this is excellent information. I’m glad we can get detail like this somewhere and how everything ties together with the big picture.
David,
Well Done, this is excellent information. I’m glad we can get detail like this somewhere and how everything ties together with the big picture.
David,
Well Done, this is excellent information. I’m glad we can get detail like this somewhere and how everything ties together with the big picture.
David,
Well Done, this is excellent information. I’m glad we can get detail like this somewhere and how everything ties together with the big picture.
THis is really beginning to bug me. The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor. Why are State officials and governments going to the federal government and reserve for a bailout? Why does private industry get a tax credit and a bailout while people at the bottom suffer. It’s time for Arnold to step up to the plate and demand the federal government to step back in. How long are we going to have to keep suffering because of Bush’s tax cuts? Why are our leaders not demanding the same royal treatment as a few billionaire bankers?
Can you David start the ball rolling?
THis is really beginning to bug me. The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor. Why are State officials and governments going to the federal government and reserve for a bailout? Why does private industry get a tax credit and a bailout while people at the bottom suffer. It’s time for Arnold to step up to the plate and demand the federal government to step back in. How long are we going to have to keep suffering because of Bush’s tax cuts? Why are our leaders not demanding the same royal treatment as a few billionaire bankers?
Can you David start the ball rolling?
THis is really beginning to bug me. The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor. Why are State officials and governments going to the federal government and reserve for a bailout? Why does private industry get a tax credit and a bailout while people at the bottom suffer. It’s time for Arnold to step up to the plate and demand the federal government to step back in. How long are we going to have to keep suffering because of Bush’s tax cuts? Why are our leaders not demanding the same royal treatment as a few billionaire bankers?
Can you David start the ball rolling?
THis is really beginning to bug me. The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor. Why are State officials and governments going to the federal government and reserve for a bailout? Why does private industry get a tax credit and a bailout while people at the bottom suffer. It’s time for Arnold to step up to the plate and demand the federal government to step back in. How long are we going to have to keep suffering because of Bush’s tax cuts? Why are our leaders not demanding the same royal treatment as a few billionaire bankers?
Can you David start the ball rolling?
“The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor.”
They are going to get TARP money, according to this story. I’m unconvinced the Big 3 are savable. This is likely good money after bad.
The problem for American auto companies is they’ve been terribly run for years, and part of that has been accepting the demands of the UAW. But the ridiculous UAW contracts are not labor’s fault — they are the fault of management and its stockholders.
A friend of mine is an executive engineer with Toyota (now in Europe). He used to work at NUMMI in Fremont (which is a Toyota-GM partnership, run by Toyota), not long after that plant reopened. One thing he said was they had to get rid of all of the old GM workers, in order to make that plant a success. The UAW had poisoned all of its workers against being productive. They had 500 page books laying out the work rules, all of them designed to stagnate the progress of the plant.
It’s still a UAW shop, but all of the old workers are gone and they got rid of the UAW rules. The upshot is that it is GM’s most successful plant in North America, and obviously that’s because it’s run by Toyota and it permits productivity.
The other terrible decision by U.S. auto makers was putting all of their eggs in the SUV and large car low-mileage nest. A prof at UCD, Andy Frank, who developed the PHEV, told me that he tried for years and years to sell GM and Ford his PHEV patents, but they completely rejected him. He said they had no intent on getting ahead of the technology curve. The result is that Toyota and Honda are years ahead of GM technologically.
The latest screw up of the Big 3 is shown with the coming of the Better Place system. If it really takes off, then there is no hope the Big 3 will survive.
You may translate all of that as an attack on labor. It’s not meant to be. Big labor cannot survive in a competitive work place if the management of its companies don’t compete to win every day.
“The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor.”
They are going to get TARP money, according to this story. I’m unconvinced the Big 3 are savable. This is likely good money after bad.
The problem for American auto companies is they’ve been terribly run for years, and part of that has been accepting the demands of the UAW. But the ridiculous UAW contracts are not labor’s fault — they are the fault of management and its stockholders.
A friend of mine is an executive engineer with Toyota (now in Europe). He used to work at NUMMI in Fremont (which is a Toyota-GM partnership, run by Toyota), not long after that plant reopened. One thing he said was they had to get rid of all of the old GM workers, in order to make that plant a success. The UAW had poisoned all of its workers against being productive. They had 500 page books laying out the work rules, all of them designed to stagnate the progress of the plant.
It’s still a UAW shop, but all of the old workers are gone and they got rid of the UAW rules. The upshot is that it is GM’s most successful plant in North America, and obviously that’s because it’s run by Toyota and it permits productivity.
The other terrible decision by U.S. auto makers was putting all of their eggs in the SUV and large car low-mileage nest. A prof at UCD, Andy Frank, who developed the PHEV, told me that he tried for years and years to sell GM and Ford his PHEV patents, but they completely rejected him. He said they had no intent on getting ahead of the technology curve. The result is that Toyota and Honda are years ahead of GM technologically.
The latest screw up of the Big 3 is shown with the coming of the Better Place system. If it really takes off, then there is no hope the Big 3 will survive.
You may translate all of that as an attack on labor. It’s not meant to be. Big labor cannot survive in a competitive work place if the management of its companies don’t compete to win every day.
“The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor.”
They are going to get TARP money, according to this story. I’m unconvinced the Big 3 are savable. This is likely good money after bad.
The problem for American auto companies is they’ve been terribly run for years, and part of that has been accepting the demands of the UAW. But the ridiculous UAW contracts are not labor’s fault — they are the fault of management and its stockholders.
A friend of mine is an executive engineer with Toyota (now in Europe). He used to work at NUMMI in Fremont (which is a Toyota-GM partnership, run by Toyota), not long after that plant reopened. One thing he said was they had to get rid of all of the old GM workers, in order to make that plant a success. The UAW had poisoned all of its workers against being productive. They had 500 page books laying out the work rules, all of them designed to stagnate the progress of the plant.
It’s still a UAW shop, but all of the old workers are gone and they got rid of the UAW rules. The upshot is that it is GM’s most successful plant in North America, and obviously that’s because it’s run by Toyota and it permits productivity.
The other terrible decision by U.S. auto makers was putting all of their eggs in the SUV and large car low-mileage nest. A prof at UCD, Andy Frank, who developed the PHEV, told me that he tried for years and years to sell GM and Ford his PHEV patents, but they completely rejected him. He said they had no intent on getting ahead of the technology curve. The result is that Toyota and Honda are years ahead of GM technologically.
The latest screw up of the Big 3 is shown with the coming of the Better Place system. If it really takes off, then there is no hope the Big 3 will survive.
You may translate all of that as an attack on labor. It’s not meant to be. Big labor cannot survive in a competitive work place if the management of its companies don’t compete to win every day.
“The banks get a 800 billion dollar no questions asked bailout. Free money. The big three are denied a loan. This is obviously a right wing attack against labor.”
They are going to get TARP money, according to this story. I’m unconvinced the Big 3 are savable. This is likely good money after bad.
The problem for American auto companies is they’ve been terribly run for years, and part of that has been accepting the demands of the UAW. But the ridiculous UAW contracts are not labor’s fault — they are the fault of management and its stockholders.
A friend of mine is an executive engineer with Toyota (now in Europe). He used to work at NUMMI in Fremont (which is a Toyota-GM partnership, run by Toyota), not long after that plant reopened. One thing he said was they had to get rid of all of the old GM workers, in order to make that plant a success. The UAW had poisoned all of its workers against being productive. They had 500 page books laying out the work rules, all of them designed to stagnate the progress of the plant.
It’s still a UAW shop, but all of the old workers are gone and they got rid of the UAW rules. The upshot is that it is GM’s most successful plant in North America, and obviously that’s because it’s run by Toyota and it permits productivity.
The other terrible decision by U.S. auto makers was putting all of their eggs in the SUV and large car low-mileage nest. A prof at UCD, Andy Frank, who developed the PHEV, told me that he tried for years and years to sell GM and Ford his PHEV patents, but they completely rejected him. He said they had no intent on getting ahead of the technology curve. The result is that Toyota and Honda are years ahead of GM technologically.
The latest screw up of the Big 3 is shown with the coming of the Better Place system. If it really takes off, then there is no hope the Big 3 will survive.
You may translate all of that as an attack on labor. It’s not meant to be. Big labor cannot survive in a competitive work place if the management of its companies don’t compete to win every day.