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Steven Greenhut
Misunderstanding Stockton « Back to Story

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A sad story.

Instead of simply trying to imitate the development strategies of other struggling cities, Stockton needs to build a quirky reputation based on its historic legacy.

For example, it's too bad Stockton can't take advantage of its vintage downtown office buildings, which have so much more character than modernistic glass boxes.

A symbol of Stockton's foolish decisions: spending $1 million to bring Neil Diamond to the opening of its $69 million arena and (according to the Stockton Record newspaper) losing $480,223 on the show. See this December 10, 2006 Stockton Record article:

Meanwhile, Chris Issak (who is from Stockton) recently performed there - not at the fancy arena, but at the Bob Hope Theater, listed on the National Register of Historic Places:

Vintage theaters and classic office buildings: yes. Fancy arenas: no.
John Wolfsberger, Jr. July 10, 2012 at 12:53 PM
Mayor Ann Johnston is a hard Left Democrat, slow growth advocate, and a darling of the SEIU (which helped greatly in her campaign). But of course, none of her attitudes and policies contributed to Stockton's problems. It's all just bad luck. Unexpectedly bad luck.
christopher mahoney, Hopefully, rather than not paying those who lend it money, California (and its cities towns) will default on it's pension obligations ..... their being clearly excessive.... by 2-6 times what they would have been in the absence of the Union/politician collusion.
christopher mahoney July 07, 2012 at 2:05 PM
California = Greece ten years ago. When the pension tsunami hits around 2020, California will default on its bonds.
Rogermortimer: Interesting take on political integrity but it’s similar to requiring the wolves to provide individual bodyguards for the local deer. The common thread running through Stockton, the City of Bell, Vallejo, Detroit and Flint, Michigan, etc. is that the local populace is overwhelmed by the complexities involved in a system of self-government.

The aforementioned cities all share a low income, poorly educated and economically unsophisticated voter populace. Contrast those demographics with the highly educated, affluent residents of Los Gatos and you may conclude certain types of voter populations are the perfect victims for self-serving elected employees with a specific – and personal - agenda.
Patrick - your comments persuaded me all the more of the wisdom of Greenhut's article. If, as you aver, many think of Stockton as a dump, that is all the more reason that the Democrats who have run the place should have maintained as low as overhead as possible, and not incurred so many fixed obligations in pension and health care costs for its workers (especially without reserving any funds to pay for them). Dumps have less financial flexibility in times of economic need, than, let's say, the Los Gatos' do. The real challenge with the out of control union dominated public spending is that it actually detracts, if not almost cripples, the liberal principle that local Governments are supposed to provide a high level of Government service. In providing for a politically connected mandarin worker group, and enacting policies which encourage huge social costs (e.g., with uncontrolled immigration), well, there's simply a shortage of productive people to pay for it all. Stockton isn't the first in California to declare bankruptcy. I wonder what the progressives will say when it happens to a city most don't consider a dump.
Quoting ... "The city’s health-care plan was so generous that employees and their spouses could sometimes qualify for lifetime health care after only a short time on the job. ... The city also approved the generous “3 percent at 50” retirement plan for public-safety workers—shorthand for a scheme calculating pensions at a rate of 3 percent of the average of an employee’s three highest years’ salary, multiplied by the number of years worked, starting as early as age 50. Many public-safety employees were able to retire at 50 with 90 percent of their final year’s pay."

Dear taxpayer ... when you combine the VERY rich pension formulas, the VERY early unreduced full retirement ages, and the post-retirement COLAs, the pensions of public Sector workers have a value at retirement, the taxpayer paid-for share of which is ROUTINELY (yes ROUTINELY) 2, 4, even 6 times (for safety workers) greater than that of the typical Private Sector taxpayer retiring at the SAME age, with the SAME years of service, and with the SAME salary.

This financial rape of Private Sector taxpayers is outrageous and must be stopped.

Taxpayers ... RENEGE on any further funding of these Plans. Demand that your local gov't no longer pay CalPERS bills claiming that the money is needed locally for essential services (which is the truth).

CalPERS should award proportionately lower pensions that can be purchased with EXISTING assets .... and no more.
This article – misleading on several accounts. First, Stockton is considered a “dump” by folks in the East Bay - high crime, run down and a vibrant urban wasteland. The I5/580 commuter freeway has become a parking lot during the daily rush hours and folks working in Oakland have no desire whatsoever to commute from Stockton – the good folks employed within Livermore and Tracy maybe and only if absolutely necessary.

Second, Prop 13 has been a political whipping boy for decades and one of this country’s favorite myths. Your property taxes do go up each and every year under Prop. 13, even if you’ve been in your home for the past 25 years. “Special Assessments” plus a miscellany of earmarked project taxes are the politicians’ workaround for Prop. 13’s failed attempt to hold down taxes.

Lastly, when you sell your home, the new owner gets exactly zero benefit from Prop. 13. The home is promptly re-assessed at market value once it sells and the proud new homeowner sees a hefty jump in property taxes over what the previous owner enjoyed under Prop. 13. Stockton is exactly like Detroit, except for the charming gangsta rep. and the lack of an “8 Mile”.
So long as voters are lazy and vote short term results for themselves and ignore all the failures of a government out of control, this will continue. Quite simply, it isn't their money and as a consequence, there is Never Enough.
The demos next goal - eliminate Prop 13.
And they'll have the votes.
I am sure the residents would love to raise their property taxes to pay for huge pensions and absurd medical benefits. We should be thankful for prop 13 that gives predictability to families and businesses.
A word about Prop 13: The property tax is unrelated to income, only to the value of your property as affected largely by external events. What happened many years ago was the inability of surviving homeowners to pat ever increasing taxes unrelated to very small incomes. I think the widow living on cat food and finally driven out of her home by prop taxes (perhaps apocryphal)was the final media straw. Nevertheless, the principle is the same: The tax can be very unfair (and worse) as it assumes prop value is equivalent to income.
Question: how much danger are property owners in Stockton from whatever measures can be taken to raise money to pay the creditors? Is Proposition 13 their salvation? What would the danger to them be without it?

Given the near certainty that the level of competence amongst both the elected and unelected in local government will not be uniformly high or even satisfactory, is there not a case for employing the pre WW1 German General Staff model which allowed divisions and Armies commmanded by nobility to be seeded with thoroughly trained professionals imbued with sound doctrines. Perhaps there should be a state level staff corps for local government (before someone in Washington DC gets the idea for creating a national level boondoggle).
jessefan in chapelhill July 03, 2012 at 10:31 PM
We are all now Detroit.
This is a good commentary, but I will offer a small quibble. The author praises Proposition 13 from restraining Stockton officials from even greater profligacy. However in their book "California Crackup", authors Joe Matthews and Mark Paul cite Proposition 13 as one of the contributing factors behind local government profligacy. They write, " Prop 13, the 1978 Jarvis-Gann initiative, did much more than reduce property taxes. It created a new operating system for the state. It centralized decision-making in Sacramento, a long-held goal of liberals, and helped public employee unions to increase their power in local government."

As more local funding came from State back-filling, rather than local property tax revenue, local citizens had less "skin in the game" and less interest in local government affairs, allowing both local unions and local developers to influence government with much less public notice.
Correct, Mr. Klatt. Tom Gray wrote on the prospects for bankruptcy in Los Angeles in April:
There will be other Californian cities that will declare bankruptcy. Once of these might be Los Angeles