With Projection Of Smaller Deficit, Cassidy’s Cause Get Tougher

WILL UNIONS MAKE MORE CONCESSIONS WITH A $1.26 MILLION BUDGET SHORTFALL?
By Steven Tavares

San Leandro Mayor Stephen Cassidy will undoubtedly bring up his plan for pension reform for city employees during Monday’s State of the City address, but times have changed in just the few months since he took office. The main argument for convincing a skeptical city council of backing his proposal is rapidly disappearing for the good of the city, but not necessarily pension reform. His main obstacle? Things just aren’t as bad as they once were.

Back when Cassidy began his campaign for mayor, he preceded it with numerous appearances before the council ramming home the idea the city was near bankruptcy in large part of a growing obligation to city employee pensions and benefits. Back then the city’s finance director was forecasting a deficit over $7 million. Whether Cassidy won the election because of fears over the city’s budget is open for debate, although it was the main distinction in his platform over his opponents.

San Leandro’s new finance director Tracy Vesely had good news for the city earlier this month when she told the finance committee the deficit could be just $1.26 million for the coming fiscal year. The forecast takes into account no wage increases, a $300,000 increase in revenue, a modest 4.5 percent rise in CalPERS and a big if—no state takeaways. With the Legislature’s recent inability to tame the state’s budget, the specter of Sacramento dipping its hands into local coffers is always a possibility.

Cassidy’s main task, assuming Vesely’s budget forecast is in the neighborhood of $1 million or so, is how to convince union members and opponents it’s in their best interests to further give up benefits for a budget far less tumulteous than once thought.

By the end of the current union contracts, San Leandro city employees will have gone nearly five years between pay increases while paying more for health benefits. As Councilwoman Diana Souza again pointed out, the history of city employees taking a hit financial hit for the economic health of the city goes back years. It is well known union employees took increases in their pensions over pay raises to save the city money when the dot.com bubble burst over a decade ago. The lack of institutional memory of that concession by some at City Hall is a fact that rankles the rank-and-file when Cassidy utters rhetoric calling for shared sacrifice.

National attention and hostility over pensions and collective bargaining in Wisconsin also does not help Cassidy’s argument for reform. Although, like many communities, union strength is waning in San Leandro, but the levers of power still run through its members. With a projected deficit of few millions in San Leandro, as opposed to relatively gigantic shortfalls in neighboring Fremont and Oakland, using the collective economic uncertainty to stick it to unions seems like contrived opportunism and almost silly.



Categories: budget, Diana Souza, economy, health care, pensions, S.L. City Council, unions

65 replies

  1. Ok, above, you got it partially wrong once again – both progressives and the far right always do that…lets talk about a tax structure that forces corporations to look for ways to stay competitve with foreign companies by moving key operations for tax purpsoes to Ireland and most other countries in the world that have a more reasonable corporate tax rate.

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  2. Bring back “fair” trade with tariffs instead of free trade. When that was in place we had a booming economy, a huge middle class, and much higher tax rates on the millionaires and billionaires. Now we are a third world country with 400 Americans controlling more wealth than the bottom 155 million Americans–the “robber barons” are back!

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  3. Yeah, Rational Guy has had the propaganda catapulted into his head. Repetition is convincing, but it does not create truth.

    GE, Bank of America, Wells Fargo, Citigroup, Boeing, Exxon-Mobil and others like them who have paid NO U.S. income taxes in recent years are “forced” to be competitive with foreign companies by moving their operations to other countries for tax purposes?

    Come, now.

    Countries who have lowered their corporate tax rate in order to attract business have gotten booms for a few years. Then their economies crash hard once the corporate-built financial bubble bursts. See, the corporations take the money from the bubble and leave the countries they abandon with the bag.

    There are zero examples of countries who have created sustainable economic booms WITH a wide middle class by deeply slashing or eliminating corporate tax rates. That is true of the states in the U.S. as well.

    It's quite revealing Rational Guy brought up Ireland as an example. I'd agree, Ireland's experiences over the last decade are a perfect example of misguided governmental policies and corporate amorality. How's Ireland doing these days, anyhow?

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  4. Once again John, you're an idiot. The Reagan tax cuts brought about 28 years of economic boom. So blow you're socialist/leftist nonesense out of a cannon.
    Manuel

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  5. Thoughts like John's are why many Democrats become Republican's or Independent when they mature and understand business in a capitalist society.

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  6. Thoughts like anon. above and Manuel's are why the far right-wing extremists are losing elections in Ca. Calif. registration numbers are 44.5% Dem., 30.8% Rep., 20.1% Decline to State, and the rest other. The party losing the most in the registration battle is the Rep. because of their extreme positions. The moderates are leaving the Rep. party in droves, but they are too stupid to see that conservative extremism = rejection!

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  7. And that is why CA is sliding downhill the fastest!

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  8. Republican registration is down more likely because they are the ones who actually work for a living and thus their jobs get transferred to more economically stable and attractive states like Arizona and Texas.

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  9. The Reagan tax cuts for the rich also drove our country into terrible debt. That said, I'd like to return to the highest marginal tax rate during Reagan's first six years in office. Would you agree to that, Manny?

    I said “…sustainable economic booms with a wide middle class.” First off, Reagan's policies began the slow shrinking of the middle class that continues to this day. Second, there was economic recession for 16 months early in Reagan's term. There were also recessions that began in 1990 and 2001.

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  10. Yeah, Arizona seems real economically stable and attractive right now, what with its hate-on-brown-people campaign they have going on right now. As for Texas, the facts have a liberal bias again:

    “(Texas currently has) a $27 billion budget deficit, larger as a percentage of the deficit than (California)….the real savings in the legislative budget plan come from slashing Medicaid and cutting per-student spending from more than $9,000 to $7,800 each year. The state's cap of 22 students per elementary school class is almost certain to be lifted.”

    http://www.calitics.com/diary/13114/texas-v-california-this-time-with-the-lights-on

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  11. John; zzzzzzzzzzzzzzzzzzzzzzzzzzz

    Proud; Can't handle the truth that Arizona and Texas are better places to run a business than California? zzzzzzzzzzzzzzzzzzzzzzzz

    Manny

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  12. Wow Manny–real intelligent post! How about some facts to go along with your opinion. Oh wait–you never give any.

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  13. Would “Manny” agree that we should return to the top marginal tax rate our country had during Reagan's first six years in office?

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  14. No “John Evans”. You obviously have no knowledge of taxes if don't know what the 1986 Tax Reform accomplished.
    Manny

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  15. Is it right that you and I pay taxes, but GE, Bank of America, Wells Fargo, Citigroup, Boeing, Exxon-Mobil and other megawealthy corporations do not?

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