Friday, November 18, 2011

Santa Ana and Its Unions Agree: Dealing with the Budget Crisis Will Be More Fun in 2013

Ever since September, we've been following the crisis that hit the Orange County city of Santa Ana after its weak tax take and Sacramento's seizure of its vehicle license and redevelopment funds wiped out its "balanced" budget. Since then, amid rumors that it could file for bankruptcy or run out of cash this month, the City Council has moved quickly to outsource a variety of city services, and is trying to negotiate concessions with its unionized employees to close the deficit. According to Voice of OC, Santa Ana is close to deals with its police and service employees' unions that could save some $15 million, or about half of the budget hole they're staring at.

Unfortunately, the deals themselves don't represent any sort of serious effort to address the city's problems. Much of the "savings" comes in the form of deferred expenditures: temporary increases in pension contributions, reductions in overtime for police, and furlough days for service employees. City Councilman Sal Tinajero describes the agreements this way: "To be honest with you, it's something to get us through right now, because we don't have reopeners. I think this buys about 18 months." In other words, it's a textbook example of "kicking the can down the road." We suppose it's possible that Santa Ana will use those 18 months to address the structural problems that led to this crisis. But we're not optimistic. If the city had the vision and the political courage to make those kinds of decisions, they probably would've done so already.


Post a Comment