“Day of reckoning” for cities and states

By Venturan — John B.

CBS News 60 Minutes aired a piece last night on what may be the next chapter in the financial mess, broken state and local governments:

An embedded embedded media appeared here in the original post. View the original — embeds are preserved as links in this archive.

Among many issues raised is the impending expiration of federal stimulus dollars to state and local governments (if you can’t get enough, there’s also the 60 Minutes Overtime report on the subject).

While our City gets credit for prudent fiscal management, there is no question Santa Clarita has benefited from stimulus funds. From city capital projects to school district projects (large and small) to general budget relief (at least 350 SCV teachers’ jobs were saved by the stimulus) – our town is awash in millions of dollars of stimulus cash.

What will the picture be for SCV after the stimulus dollars run out? And, as Jeff pointed out earlier this year, don’t expect our congressman to provide clarity on that point.

Comments (23)

ToddDecember 20, 2010 at 11:35 pm

I’m struggling to find the source on this factoid, so if I’m a bit off in my percentages, forgive me. There are several blogs that have pointed out that the Obama administration has not gone far enough in terms of spending in order to recover from this mess fully. Comparing this recession to the Great Depression (which is really the yard stick we have to measure an economic event such as this), we haven’t spent nearly the $$$ per capita, adjusted for inflation, that we did during the New Deal. Think about it: The entire Angeles Crest Highway was built. The Griffith Observatory. Historical landmarks like Dealey Plaza and Camp David. Architectural icons like LaGuardia Airport, and various works of art including the muse statutes at the Hollywood Bowl. What has ARRA done of substance? (even thats in progress?) Nothing. Part of the idea was to do “shovel ready projects” that were all done and “signed off on” but just needed funding… So nothing of such a grand scale is in the pipeline even. The project I’m working on at work is ARRA funded at a 2:1 match… the feds gave us $20MM, we have to put in $40MM of our own money. To really stimulate the economy, they should have given us a full $60MM (or more… we could easily spend more and do it better!) and let us save the money we’re spending and give us the chance to pass the savings on to our customers. Oh well, maybe in the second term… ???

ToddDecember 20, 2010 at 11:50 pm

And, I should clarify. ARRA has helped many projects of substance… I shouldn’t sound like nothing has been done. But it hasn’t done what the WPA did. Entire bridges along the Merritt Parkway were all designed and built by WPA funds. Check that… the whole parkway was built! Are we building any brand new highways with ARRA? Nope. We’re modifying some…. But thats about it.

TCRDecember 21, 2010 at 1:57 am

There is an interesting map on Recovery.gov that shows all of the ARRA projects that have not been started yet. Kind of interesting to browse through when you have time, but nothing jumped out at me as being historic like LaGuardia Airport.

ToddDecember 22, 2010 at 12:31 am

All of the maps are interesting… the one in progress shows really the lack of monumental impact we’re having. City of Santa Clarita gets $15 million and its for facade improvement, bus system upgrades, lighting upgrades, etc. Granted, they’re all pretty useful, pretty important stuff. But theres a bridge that is going to need to be rebuilt over the 14 at Golden Valley. Theres some land in the donut hole of the city that needs toxic waste cleanup. I could think of an amazing project that would transform the riverfront, into an acutal, vibrant, exciting, and meaningful waterfront place (think of demolition of the speedway, err swap meet, and take a look at the City of Tempe, AZ’s “Tempe Town Lake” project….) All things that would have a lasting impact for generations to come… and none of which can even be considered…

cashDecember 22, 2010 at 8:22 am

City of Santa Clarita gets $15 million and its for facade improvement, bus system upgrades, lighting upgrades, etc. Granted, they’re all pretty useful, pretty important stuff. None of this stuff was NECESSARY, certainly not pretty important.

cashDecember 22, 2010 at 9:13 am

http://finance.yahoo.com/news/States-to-lose-Build-America-cnnm-675847405.html?x=0&sec=topStories&pos=8&asset=&ccode =

ThomasDecember 21, 2010 at 6:20 am

At least Santa Clarita got more medians and “City of Santa Clarita” signs. Did McBean from Decoro to Newhall Ranch really needed to be repaved. How about Rye Canyon instead. That street is older and has never been touched.

cashDecember 21, 2010 at 10:19 am

Our man in DC, the boot salesman, got a $500K ear mark for the city of Santa Clarita to replace old sprinkler systems. Truly a prudent investment at a time when the taxpayers are struggling to keep their head above water. Our city will not be bragging much soon! By the way, not maintaining the roads is the first sign money is becoming a problem. The problem stays off the radar screen until pot holes begin the surface. This is part of the shell game that can be played which allows people like Ferry to brag about what a great job he is doing. Jeff is right, without grants, etc. Kenny the Skamp would not be such a shining star.

Bill ReynoldsDecember 21, 2010 at 7:57 am

Man o man, our November 2nd election and SHELLACKING of Obama’s socialist policies sure have left wing Democrats in a foul mood. Geez, if only we had more free money… Merry Christmas everyone!

HermanDecember 21, 2010 at 9:48 am

Can I have a MoonPie® too?

ToddDecember 21, 2010 at 11:05 am

Of course money is a problem…. What tax base is there? There is little commerce, very little industry, and thanks to prop 13, low property tax revenues. How do you propose we pay for roads with no money coming in???

cashDecember 21, 2010 at 11:11 am

Don’t spend on entitlements and unnecessary stuff , would be a good start.

Bill ReynoldsDecember 21, 2010 at 11:43 am

Atta boy Cash! It doesn’t take a Rocket Scientist!

JeffDecember 21, 2010 at 11:50 am

Yes! We should just trust Goldman Sachs to handle retirement, healthcare, and all the rest.

cashDecember 21, 2010 at 12:11 pm

Jeff, I hope you don’t take your argument to the poor house. What is your answer, raise taxes? No one even suggested looking to Goldman thieves to solve the problem. We seem to be in a death spiral toward financial ruin. I thought there was hope for you when you embraced the 60 minutes article. Save your money Jeff.

Bill ReynoldsDecember 21, 2010 at 1:16 pm

Jeff, if my FICA $$’s had gone into my own personal investment account from the time I first joined the workforce, I would be sooo much better off. The DOW Jones was at 906 back then; what will it be when you can retire? From my own personal experience I can tell you that Social Security stinks. No one I know could possibly live on it.

cashDecember 21, 2010 at 3:08 pm

Those with a lifestyle that could live on SS have never worked to begin with.

ReaderMamaDecember 21, 2010 at 3:26 pm

Bull. My parents did & do live on Social Security, and my father worked all his life as an engineer. He was a hard worker and truly a rocket scientist . . . but he wasn’t good at financial planning and he made some poor investments. When the bottom fell out of the aerospace industry what little he had was quickly spent. He continued to do some contract work until he had a major stroke at the age of 79, but from age 62 on, his primary source of income was Social Security. It isn’t easy, but people can and do live on it. They just don’t live in the Summit. Half the population has little or nothing more to retire on than what Social Security will pay. Forty-three percent of Americans say they have less than $10,000 saved.

Bill ReynoldsDecember 21, 2010 at 4:30 pm

Bummer… too bad he didn’t hire a financial advisor instead of blowing his $$’s. Like you admitted, he does have other income…

ReaderMamaDecember 21, 2010 at 7:58 pm

HAD other income occasionally. No longer, since the stroke. And not for the first 6 years of his “retirement.” As to hiring a “financial advisor,” the bad investments he made were made with the advice of a “financial advisor.” As Bernie Madoff’s former clients will tell you “financial advice” isn’t something you can necessarily rely on. The advice is often given to benefit the advisor, not the client.

ToddDecember 21, 2010 at 11:12 pm

Here’s the problem Bill. On the day I walked out of Arizona State University and into the workforce, the DOW was at 10400 and change. Today, 10 years later, its at 11500. Thats a pretty slow curve. I have plenty of friends who’s parents invested as much as they could afford…. and have followed even the best advice about slowing down as they approach retirement…. and guess what? They’re not retiring yet because corporate thieves have swindled their way into their own profitability and cheated hard working people out of their money. Think of the people who lost their entire 401k when Enron went belly up. Was it their fault that Ken Lay et al conspired to overinflate the value of the company (not to mention cheat you the California energy consumer out of your hard earned money as well)? Was it their fault that the Enron 401k only allowed them to invest in Enron? Sure wasn’t. But, now that they’ve lost everything… what would you have them do? Live out on the street with nothing because they made the wrong choice to have faith that their employer would do something like tell the truth?

ToddDecember 21, 2010 at 10:57 pm

What entitlements? Santa Clarita as a municipal corporation isn’t handing out entitlements…. Thanks to Prop 13, cities income is severely limited to basically their sales and business tax revenues. Because we have relatively little commerce here in town, we have no revenues as a city. So, what do you propose? Allow more commerce? Oh noes! There goes my view, my traffic, my quiet neighborhood!

cashDecember 22, 2010 at 8:12 am

Santa Clarita does spend taxpayer money on unnecessary stuff every year. This spending is going to have to stop when the state cuts off or reduces certain funding, and the DC has no more money to hand out in grants. The answer is to operate within the monies available, it is no more difficult than that. As much as some would like to believe, and in fact some brag about, the City of Santa Clarita is not an island. Federal, state and country governments are broke and the city will feel more pain soon. To beleive that life as we know it in SCV can’t change may be a mistake.

ToddDecember 20, 2010 at 11:35 pm
I’m struggling to find the source on this factoid, so if I’m a bit off in my percentages, forgive me. There are several blogs that have pointed out that the Obama administration has not gone far enough in terms of spending in order to recover from this mess fully. Comparing this recession to the Great Depression (which is really the yard stick we have to measure an economic event such as this), we haven’t spent nearly the $$$ per capita, adjusted for inflation, that we did during the New Deal. Think about it: The entire Angeles Crest Highway was built. The Griffith Observatory. Historical landmarks like Dealey Plaza and Camp David. Architectural icons like LaGuardia Airport, and various works of art including the muse statutes at the Hollywood Bowl. What has ARRA done of substance? (even thats in progress?) Nothing. Part of the idea was to do “shovel ready projects” that were all done and “signed off on” but just needed funding… So nothing of such a grand scale is in the pipeline even. The project I’m working on at work is ARRA funded at a 2:1 match… the feds gave us $20MM, we have to put in $40MM of our own money. To really stimulate the economy, they should have given us a full $60MM (or more… we could easily spend more and do it better!) and let us save the money we’re spending and give us the chance to pass the savings on to our customers. Oh well, maybe in the second term… ???
ToddDecember 20, 2010 at 11:50 pm
And, I should clarify. ARRA has helped many projects of substance… I shouldn’t sound like nothing has been done. But it hasn’t done what the WPA did. Entire bridges along the Merritt Parkway were all designed and built by WPA funds. Check that… the whole parkway was built! Are we building any brand new highways with ARRA? Nope. We’re modifying some…. But thats about it.
TCRDecember 21, 2010 at 1:57 am
There is an interesting map on Recovery.gov that shows all of the ARRA projects that have not been started yet. Kind of interesting to browse through when you have time, but nothing jumped out at me as being historic like LaGuardia Airport.
ToddDecember 22, 2010 at 12:31 am
All of the maps are interesting… the one in progress shows really the lack of monumental impact we’re having. City of Santa Clarita gets $15 million and its for facade improvement, bus system upgrades, lighting upgrades, etc. Granted, they’re all pretty useful, pretty important stuff. But theres a bridge that is going to need to be rebuilt over the 14 at Golden Valley. Theres some land in the donut hole of the city that needs toxic waste cleanup. I could think of an amazing project that would transform the riverfront, into an acutal, vibrant, exciting, and meaningful waterfront place (think of demolition of the speedway, err swap meet, and take a look at the City of Tempe, AZ’s “Tempe Town Lake” project….) All things that would have a lasting impact for generations to come… and none of which can even be considered…
cashDecember 22, 2010 at 8:22 am
City of Santa Clarita gets $15 million and its for facade improvement, bus system upgrades, lighting upgrades, etc. Granted, they’re all pretty useful, pretty important stuff. None of this stuff was NECESSARY, certainly not pretty important.
cashDecember 22, 2010 at 9:13 am
http://finance.yahoo.com/news/States-to-lose-Build-America-cnnm-675847405.html?x=0&sec=topStories&pos=8&asset=&ccode =
ThomasDecember 21, 2010 at 6:20 am
At least Santa Clarita got more medians and “City of Santa Clarita” signs. Did McBean from Decoro to Newhall Ranch really needed to be repaved. How about Rye Canyon instead. That street is older and has never been touched.
cashDecember 21, 2010 at 10:19 am
Our man in DC, the boot salesman, got a $500K ear mark for the city of Santa Clarita to replace old sprinkler systems. Truly a prudent investment at a time when the taxpayers are struggling to keep their head above water. Our city will not be bragging much soon! By the way, not maintaining the roads is the first sign money is becoming a problem. The problem stays off the radar screen until pot holes begin the surface. This is part of the shell game that can be played which allows people like Ferry to brag about what a great job he is doing. Jeff is right, without grants, etc. Kenny the Skamp would not be such a shining star.
Bill ReynoldsDecember 21, 2010 at 7:57 am
Man o man, our November 2nd election and SHELLACKING of Obama’s socialist policies sure have left wing Democrats in a foul mood. Geez, if only we had more free money… Merry Christmas everyone!
HermanDecember 21, 2010 at 9:48 am
Can I have a MoonPie® too?
ToddDecember 21, 2010 at 11:05 am
Of course money is a problem…. What tax base is there? There is little commerce, very little industry, and thanks to prop 13, low property tax revenues. How do you propose we pay for roads with no money coming in???
cashDecember 21, 2010 at 11:11 am
Don’t spend on entitlements and unnecessary stuff , would be a good start.
Bill ReynoldsDecember 21, 2010 at 11:43 am
Atta boy Cash! It doesn’t take a Rocket Scientist!
JeffDecember 21, 2010 at 11:50 am
Yes! We should just trust Goldman Sachs to handle retirement, healthcare, and all the rest.
cashDecember 21, 2010 at 12:11 pm
Jeff, I hope you don’t take your argument to the poor house. What is your answer, raise taxes? No one even suggested looking to Goldman thieves to solve the problem. We seem to be in a death spiral toward financial ruin. I thought there was hope for you when you embraced the 60 minutes article. Save your money Jeff.
Bill ReynoldsDecember 21, 2010 at 1:16 pm
Jeff, if my FICA $$’s had gone into my own personal investment account from the time I first joined the workforce, I would be sooo much better off. The DOW Jones was at 906 back then; what will it be when you can retire? From my own personal experience I can tell you that Social Security stinks. No one I know could possibly live on it.
cashDecember 21, 2010 at 3:08 pm
Those with a lifestyle that could live on SS have never worked to begin with.
ReaderMamaDecember 21, 2010 at 3:26 pm
Bull. My parents did & do live on Social Security, and my father worked all his life as an engineer. He was a hard worker and truly a rocket scientist . . . but he wasn’t good at financial planning and he made some poor investments. When the bottom fell out of the aerospace industry what little he had was quickly spent. He continued to do some contract work until he had a major stroke at the age of 79, but from age 62 on, his primary source of income was Social Security. It isn’t easy, but people can and do live on it. They just don’t live in the Summit. Half the population has little or nothing more to retire on than what Social Security will pay. Forty-three percent of Americans say they have less than $10,000 saved.
Bill ReynoldsDecember 21, 2010 at 4:30 pm
Bummer… too bad he didn’t hire a financial advisor instead of blowing his $$’s. Like you admitted, he does have other income…
ReaderMamaDecember 21, 2010 at 7:58 pm
HAD other income occasionally. No longer, since the stroke. And not for the first 6 years of his “retirement.” As to hiring a “financial advisor,” the bad investments he made were made with the advice of a “financial advisor.” As Bernie Madoff’s former clients will tell you “financial advice” isn’t something you can necessarily rely on. The advice is often given to benefit the advisor, not the client.
ToddDecember 21, 2010 at 11:12 pm
Here’s the problem Bill. On the day I walked out of Arizona State University and into the workforce, the DOW was at 10400 and change. Today, 10 years later, its at 11500. Thats a pretty slow curve. I have plenty of friends who’s parents invested as much as they could afford…. and have followed even the best advice about slowing down as they approach retirement…. and guess what? They’re not retiring yet because corporate thieves have swindled their way into their own profitability and cheated hard working people out of their money. Think of the people who lost their entire 401k when Enron went belly up. Was it their fault that Ken Lay et al conspired to overinflate the value of the company (not to mention cheat you the California energy consumer out of your hard earned money as well)? Was it their fault that the Enron 401k only allowed them to invest in Enron? Sure wasn’t. But, now that they’ve lost everything… what would you have them do? Live out on the street with nothing because they made the wrong choice to have faith that their employer would do something like tell the truth?
ToddDecember 21, 2010 at 10:57 pm
What entitlements? Santa Clarita as a municipal corporation isn’t handing out entitlements…. Thanks to Prop 13, cities income is severely limited to basically their sales and business tax revenues. Because we have relatively little commerce here in town, we have no revenues as a city. So, what do you propose? Allow more commerce? Oh noes! There goes my view, my traffic, my quiet neighborhood!
cashDecember 22, 2010 at 8:12 am
Santa Clarita does spend taxpayer money on unnecessary stuff every year. This spending is going to have to stop when the state cuts off or reduces certain funding, and the DC has no more money to hand out in grants. The answer is to operate within the monies available, it is no more difficult than that. As much as some would like to believe, and in fact some brag about, the City of Santa Clarita is not an island. Federal, state and country governments are broke and the city will feel more pain soon. To beleive that life as we know it in SCV can’t change may be a mistake.