If I want part of a story, be misled or propagandized, I will read the NY Times, the LA Times or any other mainstream newspaper. Most papers do not know the difference between honest immigrants and criminals that sneak into our nation. The mainstream media NEVER reports that the vast majority of “jobs” created by Obama have been part time, low pay/no benefit jobs. They treat a 20 hour fast food job the same as a computer technician job. They lie by omission.
The same is try of reporting on budgets. The mainstream media talks about the “lack” of money for infrastructure, etc, never mentioning the union grab of most of the available budget. If they did, they would be forced to demand the end of the stranglehold on government.
“Now to those compensation costs. Though the story doesn’t say so, the city spends $1.1 billion on pensions, up from $666 million in 2008 (see page 21 of this report). Employee benefits are another $570 million. So pensions and health care mainly consume 35 percent of general fund revenues.”
When reporters don’t bother reading budgets….
Steve Malanga, Public Sector, 9/3/14
The Grey Lady had a story Monday on how Los Angeles can’t afford to invest in its crumbling infrastructure because of a continuing budget squeeze. The story starts off with an embarrassing mistake, confusing the LA County budget ($26 billion) for the city budget ($8.1 billion)–see correction at end of later editions. Then it contains not a single other budget number of consequence throughout, suggesting the reporter never bothered (or wasn’t capable of) reading the city’s budget. That’s one reason why the story only briefly mentions pensions, doesn’t talk about other compensation issues, but hangs the problem on a host of favorite issues, like declining federal transportation aid (how much?), and (wait for it) Californians’ aversion to higher taxes (yeah, really).
But as Steve Greenhut says below, the LA infrastructure story is really a pension story, or more broadly, a compensation story, as a look at the city’s budget documents highlights.
First off, the city’s $8.1 billion budget contains about $3 billion in so-called restricted revenues from special fees and taxes, that can’t be used for just everyday spending on basic operations. The budget that gets debated every year is the revenue in the general fund, and that’s about $5 billion in so-called unrestricted revenue. Call that the real budget that LA has to fiddle with as it tries to find money for a host of needs. Out of that the city must pay for its basic operating expenses, especially employee compensation.
Now to those compensation costs. Though the story doesn’t say so, the city spends $1.1 billion on pensions, up from $666 million in 2008 (see page 21 of this report). Employee benefits are another $570 million. So pensions and health care mainly consume 35 percent of general fund revenues.
According to a 2012 study by then LA City Administrator Miguel Santana (a widely distributed report than any basic Nexis database search should have turned up), the city’s employee costs (counting salaries and benefits) have been skyrocketing, rising at about twice the rate of tax collections. Those increases, as Santana makes clear, are the result of unwise collective bargaining agreements that sent compensation soaring (see page 18 and forward) and unaffordable pension costs. The report contains a number of hair-raising charts which chronicle this debacle (see below), so it’s not as if the city’s plight is a mystery.
Of course, you could argue (if you read the Times with some regularity) that the entire story is positioned to work its way to the conclusion, which is namely that the only answer here is raising taxes, even though city officials admit LA is already highly taxed. It’s easier to say that if you don’t spend too much time focusing on the compensation monster that’s devouring city revenues.
This is the new budget calculus in many places where surging compensation costs, especially pensions, begin to squeeze basic services (crumbling infrastructure and overcrowded schools are especially worrisome, though so is declining public safety), which in turn are used to justify higher taxes, which in the end aren’t really going for the infrastructure or the schools, but to pay off those rich pensions.
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