Cities need reform, not bailouts

[Editor’s note: This op-ed appeared in the May 10 issue of the Orange County Register.]

By Jim Righeimer and Bruce Whitaker | The inevitable has happened, restoring our faith in the logic of the universe: the local politicians who supported Gov. Newsom’s shutdown of the California economy now want the governor and the Trump administration to bail them out.

But don’t be fooled. Even if you think killing the economy has been necessary, the coming collapse of government finances has less to do with the virus or the economic shutdown than with crazy government spending that goes back years, even decades. The catastrophe for cities wasn’t created in the past few weeks.

Oh, they’ll tell you it’s all about the virus. Indeed, that’s what the mayors of two Orange County cities recently proclaimed in these very pages. Under the grim-but-hopeful headline “Ensuring the survival of SoCal cities after this pandemic,” mayors Jennifer Fitzgerald of Fullerton and Katrina Foley of Costa Mesa asserted, “The COVID-19 crisis is crushing already cash-strapped California cities.”

The key word is “already.” With a few brief periods of reform, government unions supported the political campaigns of candidates like Fitzgerald and Foley. Once elected, these officials signed off on every new pay and benefits hike proposed by the union leaders who helped them into public office.

We could pick at the facts in their essay — we could point out that the 54 employees Foley claims she’ll have to lay off are mostly part-time recreational staff.

But these are quibbles. Our key point is that, in the years leading up to economic lockdown, these and other California officials have rubber-stamped pay hikes and pension benefits that their supporters, the public employee unions, demanded of them. Their government finances were unaffordable long before this disaster. The shutdown has only sped up the process of insolvency.

Consider the shameful example of Fullerton’s streets. These potholed relics would embarrass any American city. Such blight is incomprehensible in high-tax, relatively high-income Orange County — incomprehensible unless you understand that its union-backed political class consistently approves higher pay and benefits for government workers that suck up every available dollar, crowding out essential services.

The solution? If you’re Foley and Fitzgerald, first blame the virus for your predicament. Second, find someone to bail you out of your self-inflicted problems.

Foley, Fitzgerald and most California politicians — from H Street in Sacramento to Main Street in almost every town — want the state to make their payments to employee retirement systems they themselves failed to fund. They want Gov. Newsom to give them money that the governor is hoping he’ll get from the Trump administration. And they want state and federal funding for local “workforce development” programs — because they themselves helped destroy jobs.

If Foley and Fitzgerald are truly concerned about the prospect of insolvency, there’s a legitimate solution: Chapter 9 bankruptcy.

Unlike California state judges, federal bankruptcy judges have shown a remarkable willingness to unwind the disastrous pensions that created havoc in city finances long before this current crisis.

That, of course, would require Foley and Fitzgerald to turn on the union leaders who financed their political campaigns in the expectation of a payback. Doing so requires courage.

Let’s see if these officials have the heart to match their bold claim that they’re ready to fight for their communities.

Jim Righeimer was elected to the Costa Mesa City council twice and served from 2010 to 2018.  He was mayor from 2012 to 2014. Bruce Whitaker was first elected to the Fullerton City Council in 2010 and has since been reelected twice. He was mayor in 2013 and 2017.

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