Economic Development

Economic Development

CA Suffers Job Losses From Nation’s Trade Deficit with China

Trade

Over the last decade, California has been one of the hardest hit states negatively affected by the trade deficit with China. The Sacramento Bee reports that according to a study done by the Economic Policy Institute, the nation’s increasing trade deficit has cost California 370,000 jobs. On a city level, Sacramento is reported to have lost 4,000 jobs during the study’s examined period, which runs from 2001 to 2008. The United States as a whole has lost 2.4 million jobs during this same time frame. Robert Scott, the report’s author, said the following of the impact of California:

“California is being hurt in several ways. A flood of imports and market barriers make it difficult for California companies to export and make it difficult for companies to grow.”
The study made its evaluations based on the number of jobs lost for each congressional district. California has taken quite a blow in that 8 of the 20 hardest hit districts were in California. The trade gap rose to $270 billion in 2008, a huge increase from $84 billion, which was the number in 2001. While jobs lost is certainly a negative factor, one cannot forget that Americans like the cheap prices for goods that are created in China. In the meantime, Washington is pushing for China to recalibrate its currency because the U.S. believes the yuan is artificially low in comparison to the dollar.

Modesto’s Money Woes and Payroll Costs Make for an Unfeasible Equation

It makes for a poor equation when a city’s services and workers have decreased but its payroll costs have greatly risen. That is the scenario in the city of Modesto, as the Modesto Bee reports that the city has spent almost $122 million in wages and benefits last year, even though the city is attempting to curb the costs of salaries and benefits in light of its almost $10 million deficit. In an area of the state where pay is relatively high for public employees, Mayor Jim Ridenour has described the payroll costs as unfeasible in the long run, especially when private sector pay has fallen and public pay has increased. On the topic of covering such costs, Ridenour said the following:
“When you get into 80 percent of your general fund coming from wages and benefits, you've got a problem. You can't sustain it. We've got to figure out a way to reduce that and keep jobs."
The city has been forced to make some cuts and reductions. Many employees were given severance packages to leave and employees who stayed on board received a pay cut of 4.6 percent from furloughs. But the city still may have to resort to more layoffs or furloughs, as well as cracking down on overtime pay. Overtime pay was $6.5 million for all departments last year, but the city has failed to find a solution to keep the number to zero. The city’s money woes are far from over, but attempts will be made to retain essential services while solutions are worked out.

Modesto’s Money Woes and Payroll Costs Make for an Unfeasible Equation

It makes for a poor equation when a city’s services and workers have decreased but its payroll costs have greatly risen. That is the scenario in the city of Modesto, as the Modesto Bee reports that the city has spent almost $122 million in wages and benefits last year, even though the city is attempting to curb the costs of salaries and benefits in light of its almost $10 million deficit. In an area of the state where pay is relatively high for public employees, Mayor Jim Ridenour has described the payroll costs as unfeasible in the long run, especially when private sector pay has fallen and public pay has increased. On the topic of covering such costs, Ridenour said the following:
“When you get into 80 percent of your general fund coming from wages and benefits, you've got a problem. You can't sustain it. We've got to figure out a way to reduce that and keep jobs."
The city has been forced to make some cuts and reductions. Many employees were given severance packages to leave and employees who stayed on board received a pay cut of 4.6 percent from furloughs. But the city still may have to resort to more layoffs or furloughs, as well as cracking down on overtime pay. Overtime pay was $6.5 million for all departments last year, but the city has failed to find a solution to keep the number to zero. The city’s money woes are far from over, but attempts will be made to retain essential services while solutions are worked out.

A Merging of Ideas and Services: Cities Opt for Consolidation as Cost-Saving Measure

Getting creative is often difficult but necessary when tough times threaten the status quo and expectations. When it comes to ensuring that essential city services remain intact during a recession, many cities have gotten creative by using partnerships with other cities to share services as a cost-saving measure. In an editorial for the Daily Journal, it is argued that as cities face rising payrolls and pension obligations, it will be all the more necessary for such partnerships to emerge as a way to consolidate services and eliminate redundancies. The editorial also argues that expectations needs to change as well in order to reflect the pressures caused by the present economic conditions and that streamlined operations are not only financially astute but will also prevent additional taxes.

Cities that are considering services mergers include the Burlingame Police Department, which has a tentative deal to share a police chief with San Mateo, which could save the Burlingame $500,000 in the first year, according to the Daily Journal. The cities of Millbrae and San Bruno have also worked out a deal to temporarily share a police chief. San Carlos is also considering ways it can merge services to cut down on costs. All of which shows that the gates of consolidation are slowly opening as more cities consider the option.

A Merging of Ideas and Services: Cities Opt for Consolidation as Cost-Saving Measure

Getting creative is often difficult but necessary when tough times threaten the status quo and expectations. When it comes to ensuring that essential city services remain intact during a recession, many cities have gotten creative by using partnerships with other cities to share services as a cost-saving measure. In an editorial for the Daily Journal, it is argued that as cities face rising payrolls and pension obligations, it will be all the more necessary for such partnerships to emerge as a way to consolidate services and eliminate redundancies. The editorial also argues that expectations needs to change as well in order to reflect the pressures caused by the present economic conditions and that streamlined operations are not only financially astute but will also prevent additional taxes.

Cities that are considering services mergers include the Burlingame Police Department, which has a tentative deal to share a police chief with San Mateo, which could save the Burlingame $500,000 in the first year, according to the Daily Journal. The cities of Millbrae and San Bruno have also worked out a deal to temporarily share a police chief. San Carlos is also considering ways it can merge services to cut down on costs. All of which shows that the gates of consolidation are slowly opening as more cities consider the option.

San Diegan Firefighters Can’t Save Lawsuits and City’s Budget Deficit Swells

One thing that a San Diegan firefighter couldn’t save was a lawsuit he filed against the city of San Diego to acquire retirement benefits that were originally provided in 2002 but thereafter were terminated, according to the San Diego Union Tribune. A Superior Court judge threw out the case against the city filed by former San Diego firefighter’s union leader Ron Saathoff, as well as a case filed by a group of firefighters “who sued to reinstate a benefit that allowed them to use annual vacation time to buy extra years of service for calculating their ultimate pension.”

While the firefighters will likely appeal the decisions, the city’s attorney portrayed the case rulings as an affirmation of the city’s charter importance, which was used as the basis for the rulings. City Attorney Jan Goldsmith said the following of the decision:
“It is our local constitution. Our judiciary understands that and is showing a willingness to enforce it.”
In other San Diegan news, city officials recently announced that the city’s budget deficit has a hole of $25 million to $35 million that needs to be resolved by June. Three months ago the City Council closed a $179 million budget gap, but news of the new deficit will likely force more cuts and budget deliberations. The Tribune reports that the gap stems from an increase in pension payments and low sales and hotel tax revenues. The mayor is set to release a plan for how to fix the deficit in April.

San Diegan Firefighters Can’t Save Lawsuits and City’s Budget Deficit Swells

One thing that a San Diegan firefighter couldn’t save was a lawsuit he filed against the city of San Diego to acquire retirement benefits that were originally provided in 2002 but thereafter were terminated, according to the San Diego Union Tribune. A Superior Court judge threw out the case against the city filed by former San Diego firefighter’s union leader Ron Saathoff, as well as a case filed by a group of firefighters “who sued to reinstate a benefit that allowed them to use annual vacation time to buy extra years of service for calculating their ultimate pension.”

While the firefighters will likely appeal the decisions, the city’s attorney portrayed the case rulings as an affirmation of the city’s charter importance, which was used as the basis for the rulings. City Attorney Jan Goldsmith said the following of the decision:
“It is our local constitution. Our judiciary understands that and is showing a willingness to enforce it.”
In other San Diegan news, city officials recently announced that the city’s budget deficit has a hole of $25 million to $35 million that needs to be resolved by June. Three months ago the City Council closed a $179 million budget gap, but news of the new deficit will likely force more cuts and budget deliberations. The Tribune reports that the gap stems from an increase in pension payments and low sales and hotel tax revenues. The mayor is set to release a plan for how to fix the deficit in April.

Tough Times Continue for Bankrupt Vallejo: Listen to Interviews with City Officials

Vallejo

While we relayed here last month that the bankrupt city of Vallejo was struggling to deal with the negative effects of its great budget problems, crime continues to be a major problem for the city, as it has been repeatedly forced to cut officers in its police department. Year by year Vallejo has had to cut essential services and after the police force faced the chopping block, there was a wave of violent crimes. We pointed out last month that the city will likely have to lay off more city officials in June if a $5 million shortfall cannot be resolved by then. If that happens, Vallejo will only have 89 officers to cover a city with 117,000 residents.

More coverage on Vallejo’s woes can be found from KALW as reporter Adelaide Chen files a podcast of interviews with Mayor Osby Davis and police officials. You can download the link below to listen or here to view a transcript of the interviews.

KALW Podcast: Vallejo's Bankruptcy

(Photo: Angelo P. of the Vallejo Independent Bulletin)

Tough Times Continue for Bankrupt Vallejo: Listen to Interviews with City Officials

Vallejo

While we relayed here last month that the bankrupt city of Vallejo was struggling to deal with the negative effects of its great budget problems, crime continues to be a major problem for the city, as it has been repeatedly forced to cut officers in its police department. Year by year Vallejo has had to cut essential services and after the police force faced the chopping block, there was a wave of violent crimes. We pointed out last month that the city will likely have to lay off more city officials in June if a $5 million shortfall cannot be resolved by then. If that happens, Vallejo will only have 89 officers to cover a city with 117,000 residents.

More coverage on Vallejo’s woes can be found from KALW as reporter Adelaide Chen files a podcast of interviews with Mayor Osby Davis and police officials. You can download the link below to listen or here to view a transcript of the interviews.

KALW Podcast: Vallejo's Bankruptcy

(Photo: Angelo P. of the Vallejo Independent Bulletin)

Part 1: The Green Scene—RDAs Perfect ‘Green’ Vehicle for Environmental Legislation?

As Gov. Arnold Schwarzenegger has been increasingly forced to defend AB 32, California’s landmark greenhouse gas reduction law, especially in light of a potential ballot measure that would suspend the environmental law and a recent LAO report that suggested it would cost the state jobs, questions abound as to how California can actually successfully implement the mandates of AB 32, as well as SB 375, which is intended to compel local planning agencies to make choices that reduce Vehicle Miles Traveled. However, one avenue that deserves greater exploration is creating 'Green' Redevelopment Agencies in order to leverage the nexus that could productively exist between realizing green legislation and RDAs. Larry Kosmont, the President and CEO of the development services firm Kosmont Companies, has developed this very idea and in a series of posts we will highlight the potential benefits of such an enterprise and how it could be developed.

In order to understand why RDAs could create an economically viable model of environmental sustainability, it’s important to understand why the status quo may fail to accomplish the goals set out by AB 32. One, there is simply limited funding for green mandates and policies and it’s tactically overwhelming to implement such a plan. Also, businesses have not received the guidance and support they need to follow a green agenda, so their support has been lacking. Kosmont suggests one solution is to redefine the charters of RDAs so they can help local governments reduce pollution.

Specifically, since RDAs have expertise in economic development, they are an ideal agency/leader to incorporate sustainability at a local level. Furthermore, accomplishing the mandates set by SB 375 will require collaboration between local governments and regional agencies. Redevelopment funds can also be used to adopt LEED standards and develop knowledge in the conversion of existing buildings to meet higher energy efficiency standards. Finally, if RDAs have expanded access to federal funding for green energy, by extension their scope can easily expand to include achieving sustainability.

Stay tuned for more coverage of how green RDAs could be achieved and what their roles would be.
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