George Rebane

“Will your “leaders” simply shrug or will they learn from the crash of Vallejo?”  So starts the latest of a series of timely posts on unfunded and unreported liabilities by Mike McDaniel on the SESF blog.  Mike has been uncovering such unfunded and unreported liabilities currently burdening the Nevada County jurisdictions for retirement and health benefits due their staffs.  With the impending release of the most recent CalPERS data, a number of ‘other shoes’ are about to drop that will shed more light on the fiscal viability of California’s cities and counties including our own.

I recently had lunch with a local public finance maven, and we talked about the history of shenanigans that have gone down, most completely out of the public eye.  There appears to be a situation in place across the state which is best characterized by what Garrett Hardin taught us as the ‘Tragedy of the Commons’ (see Numeracy Nugget #2 ).  And when the pools of public employee benefits – which are a type of ‘commons’ – start unraveling, it will not be a pretty sight.

We will see that the denials – coming right down to the declarations of municipal and county bankruptcies – will sound a lot like the denials we have heard (and continue to hear) from the subprime disasters now cascading through the financial institutions.  A good place to stick your ear to the ground is right here in Nevada County, and we’re not even in the worst shape when you look up and down the state.  To be fair, a lot of the denials have been and will continue to be professed in all sincerity, because the individual situations are complex tangles of cross-purposed funds, arcane state regulations, and budget accounting (or lack thereof).

I urge you to continue reading Mike’s posts in the coming weeks, and ask your own questions of our electeds.