The economy has been booming over the last decade, which has provided local governments with a windfall in sales and property taxes. Despite the economic fat times, California cities have been complaining about their dire economic straits, with some of them even fearing insolvency unless something is done to change the financial trajectory.
What explains this dichotomy? The answer is simple. The costs of public employee compensation, especially pension and retiree-medical benefits, continue to climb exponentially and are consuming ever-larger portions of local general-fund budgets. One need only look at the Transparent California website to get a sense of the eye-popping levels of pay and benefits.
Instead of addressing this well-documented problem, state and local leaders have relied on a tried-and-true method: asking local taxpayers to increase taxes on themselves. California voters will see the latest evidence of this at the ballot box during the March 3 primary. The California Taxpayers Association (CalTax) recently published a list of more than 230 tax increases that will be on local ballots.