Who is responsible for our public debt?

Finally. Americans from every state in the union have been awakened by that four letter word called debt. The future cost of universal health care has been pegged at one trillion dollars. We have just witnessed half of the House argue that we are placing a huge burden on our kids and grandkids by Sunday’s passage of HR 3590.
Until recently I had not heard that number referenced at the kitchen table. However I do carry a $50 trillion dollar bill in my wallet that I purchased in Zimbabwe last fall. This was just after the government canceled their nations currency. Last spring it would enable you to purchase a loaf of bread.

There are elected officials who have been concerned about our debt for many years starting with Congressman Tom McClintock who I put at the top of my list. Right behind Tom is Assemblyman Chris Norby, Senator Mimi Walters, Assemblyman Chuck Devore and Assemblyman Jim Nielsen. They get it. It’s called redevelopment or bonded indebtedness.

Our Sept 2007 booklet entitled “Redevelopment: The Unknown Government” reports our total indebtedness statewide at $81 billion in 2006. Table 4.1 shows that debt increasing every year over the past decade.

So while elected officials wring their hands over uncontrolled Federal spending, perhaps they should look at themselves in a mirror. You’re doing the same thing at the local level.
Case in point. The city of Mission Viejo lost a few million redevelopment dollars on a bush league baseball team called the Vigilantes and the Kaleidoscope project. However, that was “chump change” when benchmarked against the city of San Diego whose Qualcomm stadium was built for the San Diego Chargers.

It has been reported that the city of SD loses $12 million per year to operate Qualcomm stadium. The Voice of S.D. report on a refinancing plan states: “based on the most recent city plans, we estimated taxpayers would spend $195.5 million between now and the end of the Chargers lease at Qualcomm.” Story link: http://www.voiceofsandiego.org/government/thehall/article_3c38cb2a-2ae9-11df-9cd3-001cc4c002e0.html

Oakland and Santa Clara are being “played” like a Stradivarius violin by the S.F. 49ers. Measure J, a proposed San Francisco 49er stadium in Santa Clara on the June 8th Ballot, was debated by multiple readers of the March 19th San Jose Mercury News. Some reader comments follow:

“The stadium rip-off is a bad idea. And Mercury News, please remember to mention the stadium’s Authority’s $330 million in bonds that the citizens of Santa Clara will be responsible for.”

 “Please remember to vote NO on the stadium. No more hand-outs for corrupt politicians and the billionaires who own them.”

“I’ll say that the Measure is a con-job. Construction jobs for a few years and then 40 years of RDA and stadium debt payments.”

“The council isn’t talking about the debt because it is too uncomfortable.”

My last one liner form that story. “The Yorks/49ers will be exempt from paying full property taxes for the new facility.”
Each of the above and several other reader comments can be read at the following link:

http://forums.mercurynews.com/topic/santa-clara-49er-stadium-proposal-named-measure-j

Let’s cross the Bay and see what’s happening in Oakland where a reader writes that the city “is still paying off tens of millions per year in Coliseum debt, who do you think will pay for a new stadium?” Story link follows:
http://www.fieldofschemes.com/news/archives/2009/12/3952_oakland_tosses.html

Professional sport team owners create bidding wars that suck in ego driven city council members for local bragging rights. In this case the city of Oakland is fighting to keep the A’s who are being courted by the City of San Jose.

Amazing. As a reference point we are all concerned about our state budget where the current shortfall is $20 billion dollars. Including their outstanding principal and interest the city of Oakland was in first place (in 2005-06) with $5.5 billion in total indebtedness.

UPDATE: Mercury News:

Special Report
With the political campaign yet to reach halftime, the San Francisco 49ers have already poured nearly $1.4 million in cash and manpower into the effort to persuade voters to build a new $937 million stadium in Santa Clara, according to financial disclosure documents filed Monday.

From Jan. 1 to mid-March, the 49ers pumped $775,000 in cash into the campaign, cutting the biggest check, for $250,000, on March 4, the documents show. The effort to push Measure J on the June 8 ballot also spent nearly $1 million over the same time period on everything from lawyers and political consultants to polling operations.

Meanwhile, Santa Clara Plays Fair, the group aligned against the stadium project, has raised less than $3,000, according to the group’s financial disclosure statement.

“Instead of letting money talk, we’re letting our voices talk,” said Bill Bailey, the group’s treasurer.

49ers officials are not making any apologies for spending big to secure a vote on the stadium measure, saying it is necessary to get their message out to the city’s residents on the complicated terms of the plan to build a 68,500-seat NFL stadium adjacent to Great America theme park.

“We’re willing to write the checks that need to be written to get the word out,” said Lisa Lang, the 49ers’ spokeswoman. “It shows we’re serious about this project.”

Bottom line. If voters are worried about the financial burden on their children and grandchildren, where services may be reduced to cover current borrowing and spending, let me urge you to get a copy of our RUG. “Redevelopment: The Unknown Government” to get a better understanding of tax increment diversion.

Copies of the RUG should be available at our next Conference on Redevelopment Abuse that is being held at the Ontario Airport Marriott on Saturday, May 1st. This year’s southern California event features Scott Bullock, Senior Attorney from the Institute for Justice. Scott served as co-counsel before the US Supreme Court in the Kelo Vs City of New London property rights case.
For additional information on this topic or to register for the event call 714-981-8474

Larry Gilbert, Orange County CO-director, Californians United for Redevelopment Education.


About Larry Gilbert