On May 2, 2017, City Manager Patrick Wiemiller said in a briefing to the Lompoc City Council, “The biggest financial hurdle facing Lompoc, according to staff, is the city’s obligation of about $70 million to the California Public Employees’ Retirement System, or CalPERS.”
Today the deficit is well over $90 million and growing.
The obligation to pay these folks, many of whom retired years ago, isn’t going away any time soon; staff estimates have determined that it will take the next 20 years or more just to get contributions back to the point we are at today. Retirement benefits are part of their negotiated pay packages, and this commitment is set in stone.
This problem is not unique to Lompoc. In 2015, Lawrence J. McQuillan published California Dreaming, which highlighted the unfunded liability crisis.
In the book, McQuillan says, “Pushing the pension liability from today and onto our children and grandchildren leaves them with a depleted future and a potentially bankrupt California. State and local governments will scramble to find funds, forcing them to raise taxes, slash public services, and/or declare bankruptcy.”
Lompoc has already slashed public services, and it has had no impact on the ability to pay down the unfunded liabilities. To help with future costs, the city has negotiated new retirement benefit calculations for incoming employees in all work groups. But these changes won’t produce results until the newly hired employees retire, which will be a few decades in the future. In the meantime, something had to be done.
During budget hearings in June of 2018, then Mayor Bob Lingl made a motion to address budget shortfalls in the next budget cycle. He pressed the urgency of placing a modest temporary 1 percent sales tax increase on the November 2018 ballot, and Councilwoman Jenelle Osborne seconded the motion.
Following Councilman Jim Mosby’s lead, Councilmen Dirk Starbuck and Victor Vega remained silent and the motion failed. When the 2019-21 budget was finally approved in May of last year, the three still objected to placing the sales tax matter before voters.
Then suddenly on June 24, 2019, Councilman Starbuck seemed to have changed his mind. He had been discussing the matter with the city finance director, and they had come up with a plan to place a tax measure on the March 2020 ballot.
An ad hoc committee was formed consisting of Mayor Jenelle Osborne and Councilman Victor Vega, and they prepared an argument in favor of the new tax measure. When the word “deficit” appeared in a draft version of Lompoc’s proposed sales tax measure argument, Councilman Mosby stated that he couldn’t support it.
His argument was that the “city budget was balanced,” thus there could be no deficit.
A deficit is defined by the Merriam-Webster dictionary as “a lack or impairment in an ability or functional capacity,” “an excess of expenditure over revenue”; the recommended remedy is to “raise taxes to help reduce the budget deficit.”
To bring this closer to home, let’s look at our household budget. Whether you use a checkbook or debit card, you can only spend the money you put in your account; thus, in theory, you have a “balanced budget.” But suppose your car had some mechanical problems, your roof leaked, or someone in your family was seriously ill and needed medical care.
If you don’t have an adequate reserve to cover these type expenses, you have a budget deficit. To resolve it you would have to find additional revenue with part-time work or maybe even a second full-time job.
For the city of Lompoc, the elected leaders of our community have known for a couple of decades that the CalPERS debt, or “unfunded liability” as it’s called, was increasing each budget cycle; their answer was to “kick the can down the road” and defer payments in order to fund favored projects.
The can has now hit the curb and can’t be kicked any farther.
Councilman Mosby needs to buy a dictionary or figure out how to use an online version to help him with hard words like “deficit.” While he claims to be a budget expert, it has become abundantly clear that he really can’t figure it out.
The passage of the 1 percent sales tax is, according to information provided by the city, “essential to provide a measured and stable revenue source to fund essential city services, maintain public safety, and help the city maintain its financial viability.”
Your yes vote on Measure I2020 will help preserve those services.
Ron Fink writes to the Sun from Lompoc. Send your thoughts, comments, and opinionated letters to letters@santamariasun.com.
This article appears in Jan 16-23, 2020.