Layoffs back in the News
I'm sure that most of you are aware that the State of California is beginning to come clean with their budget situation (click here for story). I don't think there was a state budget watcher anywhere who believed that the budget they passed was even close to balanced. As Dan Walters noted:
Anyone with half a brain and a hand calculator could figure out that many assumptions on which the budget was based, both spending and revenues, were unrealistic, some of them conjured out of thin air to "balance" an inherently unbalanced budget for political reasons.
The question now is whether or not the state's labor unions will attempt to come up with a revenue enhancement that continues to put off the inevitable--massive layoffs at the state level. It isn't unrealistic to think that the state will have a repeat performance of last May, when they attempted to extract more dollars out of the voters--who will likely overwhelmingly turn it down.
In the past few days, two of our neighboring cities (Lathrop and Tracy) floated the idea of tax measure for public safety. Both proposals were shot down. Here in Manteca, our Budget Advisory Committee emphatically shut down the idea of revenue enhancements eight months ago.
For some reason, our state government always seems to be the last to get the message.
We've also got a number of cities still coming to grips with our woeful revenue situation. The City of Vallejo, as part of their mid-year budget is looking at laying off seven more police officers (click here for story).
In Fresno, it looks like over 100 layoffs and furloughs are in the works.
Addressing the City Council and a packed council chamber, Swearengin said she understands the pain of those who would lose jobs and the frustration of Fresnans who could see reduced services.
But, she added, "before anything else, our No. 1 responsibility is to be good fiscal stewards."
Swearengin and City Manager Andy Souza outlined a plan to fix a $27.8 million general fund deficit expected to unfold over the next 18 months. The problem is a sharp and unexpected drop in various tax revenues and a jump nearly as sharp in expenditures, particularly retirement costs.
Swearengin's plan comes only about six months after city officials made cuts and layoffs to close a $27 million budget shortfall.
Looking ahead, city officials said an additional $4 million to $9 million in cuts may be necessary to balance the 2012 budget.
"We are an organization that must contract," Swearengin said Thursday afternoon during a meeting with The Bee's editorial board.
Among other things, Swearengin is calling for 125 layoffs, a mandatory 40-hour furlough for many employees, plus the closing of four of the Parks Department's neighborhood centers and two fire stations. The fire stations are Station 10 in east-central Fresno and Station 18 west of Highway 99.
Click here for full story
I don't expect the revenue picture to get any better anytime soon. The real estate market problems are not just a subprime issue anymore as noted in this story:
A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery.
Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default.
At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a record high for the ninth straight quarter.
The Mortgage Bankers Association's report Thursday suggests the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages.
After three years of plunging prices, the housing market started to rebound this summer. While optimists hope the worst is over, pessimists say there are simply too many foreclosed properties that have yet to be dumped on the market and expect further price declines.
Click here for full story
Anyone with half a brain and a hand calculator could figure out that many assumptions on which the budget was based, both spending and revenues, were unrealistic, some of them conjured out of thin air to "balance" an inherently unbalanced budget for political reasons.
The question now is whether or not the state's labor unions will attempt to come up with a revenue enhancement that continues to put off the inevitable--massive layoffs at the state level. It isn't unrealistic to think that the state will have a repeat performance of last May, when they attempted to extract more dollars out of the voters--who will likely overwhelmingly turn it down.
In the past few days, two of our neighboring cities (Lathrop and Tracy) floated the idea of tax measure for public safety. Both proposals were shot down. Here in Manteca, our Budget Advisory Committee emphatically shut down the idea of revenue enhancements eight months ago.
For some reason, our state government always seems to be the last to get the message.
We've also got a number of cities still coming to grips with our woeful revenue situation. The City of Vallejo, as part of their mid-year budget is looking at laying off seven more police officers (click here for story).
In Fresno, it looks like over 100 layoffs and furloughs are in the works.
Addressing the City Council and a packed council chamber, Swearengin said she understands the pain of those who would lose jobs and the frustration of Fresnans who could see reduced services.
But, she added, "before anything else, our No. 1 responsibility is to be good fiscal stewards."
Swearengin and City Manager Andy Souza outlined a plan to fix a $27.8 million general fund deficit expected to unfold over the next 18 months. The problem is a sharp and unexpected drop in various tax revenues and a jump nearly as sharp in expenditures, particularly retirement costs.
Swearengin's plan comes only about six months after city officials made cuts and layoffs to close a $27 million budget shortfall.
Looking ahead, city officials said an additional $4 million to $9 million in cuts may be necessary to balance the 2012 budget.
"We are an organization that must contract," Swearengin said Thursday afternoon during a meeting with The Bee's editorial board.
Among other things, Swearengin is calling for 125 layoffs, a mandatory 40-hour furlough for many employees, plus the closing of four of the Parks Department's neighborhood centers and two fire stations. The fire stations are Station 10 in east-central Fresno and Station 18 west of Highway 99.
Click here for full story
I don't expect the revenue picture to get any better anytime soon. The real estate market problems are not just a subprime issue anymore as noted in this story:
A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery.
Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default.
At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a record high for the ninth straight quarter.
The Mortgage Bankers Association's report Thursday suggests the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages.
After three years of plunging prices, the housing market started to rebound this summer. While optimists hope the worst is over, pessimists say there are simply too many foreclosed properties that have yet to be dumped on the market and expect further price declines.
Click here for full story
posted by City Manager @ 12:15 AM
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