George Rebane

Yesterday we heard reports about Vallejo’s financial problems and that it may soon declare bankruptcy.  Groups of city emergency services employees are resigning early so as to save their pensions.  These dire straits are reported in other media markets (see here), our local media have yet to see a reason to report or comment on the matter.  For a more complete discussion of this situation as it may apply to local governments in Nevada County, read the piece by Mike McDaniel, Executive Director of SESF. 

To this observer, Vallejo’s problem seems to be the same ol’ same ol’ of government taking care of its employees.  The typical scenario goes something like this.  Since government deals with other people’s money (OPM) that it has the imprimatur to collect by force if necessary, there is little feedback between performance and pay.  To get along, everyone goes along and ratchets employee wages and benefits at every opportunity.  These become fixed obligations in the budget.  The rest of the stuff, like services and infrastructure maintenance, is done with what’s left over. And if there is not enough left over to cover such needs, then they are deferred – e.g. the potholes are not fixed again this year.  Soon such deferments pile up until a critical point is reached the solution to which is always the need for more government income through either higher taxes or more borrowing (which leads to higher taxes, a result of the TINFL Law).

What to do?  Easy, manufacture a very visible crisis by shutting/slowing down a widely appreciated or critical government service or function – say, close the municipal swimming pool – and then pitch the need for higher taxes or a new bond issue.  This process can be pulled a number of times before the voters catch on.  But, hey, what can we do?  We need our water, sanitation, parks, fire, and police.

We in Nevada County are lucky that our city and county governments are not up to any such shenanigans.  Just recently the county declared itself fiscally fit as a fiddle, and since there is no peep from the cities (or alarms from our ever watchful media) they must be doing OK also.  As opposed to the folks in Vallejo – and a lot of other cities eyeing how Vallejo wiggles out of this one – we here in the mountains are truly blessed.

TINFL? – pronounced ‘tinfel’ – is the old ‘there is no free lunch’ maxim.