“Those who cannot remember the past are condemned to repeat it.” George Santayana in The Life of Reason, 1905.
“I do not support new taxes to [hire more police officers] because we have a thriving economy.” Anaheim City Council member Kris Murray, at a city-sponsored Budget Workshop promoting a return to “pre-recession” spending.
To whatever extent the ‘boom and bust’ cycle is unavoidable, the same can not be said for the 2008 Financial Crisis and subsequent Great Recession. Nothing in history or economics suggests that everyone and everything everywhere must be leveraged to the hilt when there is a contraction in the market. For local governments, the take-away moving forward is that the severity of an economic slow-down will turn on a municipality’s current and future spending obligations. No lobbyist nor politician can change the fundamental nature of things; quite apart from ‘boom and bust’ unnecessary spending (waste) will lead to higher taxes, an increasingly hostile business climate, and ultimately, cuts to public services/staff.
Councilwoman Murray’s belief in a tax-free increase in public safety spending, quoted above, reflects what is policy at City Hall: don’t worry, just keep spending. The Council Majority regularly assumes unrealistic growth, while grossly exaggerating the economic benefits of the spending itself, i.e. jobs. New police will increase economic activity, and increased economic activity will pay for the new police.
This is the approach that brought about the severity of the recent crisis. Unrestrained spending during (relative) times of growth limit a government’s ability to reassure markets in a state of panic. Debt and other future obligations inevitably factor into the equation, foreclosing on options that would otherwise lead to a quicker recovery.
The ‘spend for spending sake’ mentality has been on display all summer. Last week, the Council once more debated and approved a $200 million expansion to the Convention Center. As it’s not just lying around, the city must borrow to construct the 200,000 square feet glass structure. The no-bid contract was approved, therefore, alongside $300 million in new bonds (debt). The taxpayers of tomorrow – and for the next thirty years – will pay $15 million annually to cover the bonds, while the Council Majority… capitalizes… on the no-bid deal with developers this year, an election year.
Pending for months, the consequential plan for the Convention Center’s seventh upgrade faced mounting criticism. From the beginning, it was opposed by Mayor Tait because of the high, per square foot, cost of the project and in light of other debt obligations on the city’s horizon. Outside City Hall, the Orange County Register Editorial Board argued:
Convention centers are a risky venture to begin with, and expanding a convention center is an even riskier proposal. Many such venues across the country routinely lose money and are dependent on taxpayer subsidies.
It would be far better for private entities to assume the risks of such a venture, determining whether the market could benefit from such an expansion, rather than the taxpayer.
Leaving the accumulating criticism unanswered, the Council Majority kept pushing the project through arguing it would create jobs and keep the Convention Center competitive. The Majority’s line was publicly stressed by some of the coalition’s biggest supporters: the building trade unions spoke of jobs, while elite business interests spoke of competition.
As it turned out, litigation caused the aforementioned scene to be repeated months later, and all throughout proponents were reminded that no one opposed expanding the Convention Center, creating jobs or keeping the venue competitive. Completely ignoring, missing or misconstruing the criticism, Councilwoman and candidate for mayor, Lucille Kring, stated: “You could say these conventions won’t go, but they are absolutely going.”
Ms. Kring made the same argument when she voted to amend the city’s stadium-land lease with Arte Moreno. If the team owner is not given vastly more favorable terms, she maintained, the Angels will leave Anaheim. Before any deal could be negotiated however, Ms. Kring voted with the Majority to extend the opt-clause in the current lease with Moreno, thus providing him with an additional two years to move the team.
For her part, Ms. Murray gave a familiar argument throughout the debate on the Convention Center. A consistency matched, unsurprisingly, by her dedication to the state’s high-speed rail boondoggle. “Anaheim is ahead of the curve… cities are considering a sales tax increase because they are cutting services and can’t make ends meet.” In Anaheim, she then concluded, “we aren’t in that position, we are reinvesting.” She might as well said, “I do not support new taxes to do this because we have a thriving economy.”
In conclusion, I’d like to reach-out to another group of supporters enabling the Council Majority: government labor unions. I get it, the appeal that is, because it does sound great. These people are promising to increase your budgets with money that manifests in thin air. In reality, the Majority is making a promises on the back of the next generation. The Majority has no idea whether the obligations will be kept or whether they are sustainable. In any event, when it is time for Murray’s new police officers to collect pension, she will have long left the City Council.
During the Great Recession, Anaheim, unlike many localities, managed without laying-off firefighters or police officers. Under the economics of the Council Majority, sadly, the younger amongst them today will not be afforded the same luxury.
On the issue of the ACC bonds Murray just lied in some written statement saying the bonds would be paid off due to a “private” revenue stream – the 2% TOT that the hotels put on themselves.
The lie was laid bare by Anaheim’s own Finance Director who admitted that the 2% money was spoken for – 75% for Resort promotion and 25% for Resort transportation.
The bonds are paid for from the General Fund. Pure. Simple. Just like the ACC bonds that preceded them.
Now what kind of person would put out that sort of bald-faced prevarication? Someone either very confident or someone very desperate.
The “conservative” council majority has never, once, opposed a major spending plan in Anaheim.
I find it very hard to believe that the trio is actually running for re-election on a platform bragging about how many tax dollars they’ve collectively spent during their tenure.
Vote for me, Kris Murray! I’ve spent ONE BILLION of your tax dollars and I want to spend more . . . because I’m a real fiscal conservative.
Killing the party. One crappy project at a time.
And yet, Ryan, look at all the “conservatives” who endorse Murray. I think the Party is happily killing itself. And you know, will anybody really miss it except the kleptocrats who using it to fleece the taxpayers?
I still find fliers out there touting a Scott Baugh endorsement…
http://www.orangejuiceblog.com/2014/01/lucille-kring-liar-elitist-and-no-conservative-with-must-see-video/
What is proper for endorsements, do you ask again when you run for reelection, or just lay low and keep your fingers crossed?
“Conservatives” who blindly endorse the kleptos. That’s a worthy story on its own. As well as all the “Democrats” who back Eastman and Brandman.
but don’t foodstamps stimulate the economy? How about paying some fired guy 100K and giving him back his 100K job. why didn’t that happen at BOS Nelson’s office? Zenger would have spent it and the economy could have rolled .
Maybe because some “fired guy” saved the taxpayers two million bucks in less than three years – and can prove it.
Do we know who you are yet? Because, otherwise, this is just the sort of bullshit anonymous attack on someone that I would like to spike.
Meanwhile, what other parts of the law do you completely fair to understand in addition to employment law?
Klepto mantra: when in doubt complain about hypocrisy or make a personal attack. They’re the only two tools in their solid gold belts.
my apologies Mr. Diamond. I didn’t know comments like mine were not allowed. Duly noted , will stick to subject in future. Please inform John Earl to do the same.
To OJB commenters and readers: some friends and I are looking for an individual named Kris Goudey; or who may go by that alias. If you know of any such person we would appreciate any information anyone might be able to provide.
Also please be on the lookout for a Linda S. Fossell.
and look out for a high paying county job for zenger while you are at it. he’s really good. he tells us so.
I’m good enough to ferret out a weasel like you in about 13 minutes, Jimmy boy.
In the meantime I might just start a compendium of favorite deadwhitemale comments over the years to share with Mesa Water District® ratepayers and voters.
lol
Yep, love the monumental horseshit from Council, the Convention Center pays for itself, no public funds, yada yada yada…can’t understand how the Mayor can’t see a Revenue Bond when it is right in front of him? Well maybe because these are NOT revenue bonds, and the public WILL fund them!
A true revenue bond is paid SPECIFICALLY by the development! Not good enough to simply say it is coming from TOT (which is NOT set aside but dumped into the General Fund where they conveniently swish it around with the rest of our revenues and then quietly remove the bond payments so nobody ever traces where the revenues match the payments) it should be paid BY THE CONVENTION CENTER! Fees for using the Convention Center should be paying these bonds, then operating costs, (like the salaries of morons working for the City claiming this is a great deal.
Would they STILL advocate for that if the payments got between them and their 6 figure salaries?) In fact, what they should have done was form a Community Facilities District within the Resort, and genuinely tax themselves to pay for the Convention Center, and make sure THEY are on the hook for the payments, not the taxpayers shoveling into the open maw of the General Fund! How disingenuous does it get to claim they are self funding, mock us for objecting, and then stick us with the Invoice?
Good summation. The ACC is in the red once you figure in the bond payments that ALREADY are paid for from General Funds.
Like a thunderstorm after a drought, tonight YouTube seems unusually (randomly) bountiful.
http://youtu.be/ZPHSXUS0_1c [Embedding disabled – you’ll have to click on that – ED]
I don’t have cable, so excuse me if this clip is only new to me, but it struck me that the Anaheim equivalent speech needs to be addressed to our Math – phobic, finance – illiterate Council majority, when they invoke history and civic destiny, after unquestioningly swallowing whatever staff feeds them, to quell their self-induced hysteria, without letting further questions delay the ‘YES’ vote they couldn’t wait any longer to cast.
Hearing our Mayor Pro Tem invoke their lack of a Resort Area to stoke fears of impending sales tax hike votes by Stanton and Placentia, oblivious to DOZENS of more prominent differences in tax and industrial base, freeway access, and SIZE (criminy, Stanton could nearly fit INSIDE our Resort district!), etc. was enough to swell both my own shame at such civic absurdity, and enough to fill that which she apparently LACKS.
Apparently merely beating their mantra word “conservative” into the ground by repetition, enables such plans to DEFLECT scrutiny, instead of SURVIVE IT. Questions never ASKED, are never ANSWERED, but I have one – WHERE DID THE $20 MILLION GO, between THIS scheme, and the LAST one? LIBOR interest rates (who knows WHAT index THEY use???) have only risen 0.6% in the time between, and for $300 MILLION over 30 Years, Kring let slip a $10 Million figure (NOT 20!) on financing cost with EXPLANATION NEITHER ASKED NOR OFFERED – is that NEW? ADDITIONAL? —-WHAT?
In a Mortgage loan, (for analogy) you get BY LAW a preliminary disclosure breakout before the final settlement (for this, after the bonds sell) – SO FAR AS I SEE, WE HAVE NEITHER. And BTW, HOW were THESE Banks selected for our business??Another glib assertion was made, to the effect of “We’ll probably be refinancing this again for lower rates in the future”. To anyone even SLIGHTLY familiar with the word “Tapering” regarding the Federal Reserve’s effort to conjure a “recovery” with near-zero lending rates, such naive optimism is beyond incredulous. My personal take on this “bold leadership”? Google the Wikipedia narrative of Aeroflot Flight 593.