July 31, 2006 - Palo Alto Rotary Club & The State of the City Address
Conviction and common sense solutions will help manage the cost of government, not raising taxes!
Today, I attended a Palo Alto Rotary Club meeting as the guest of Palo Alto City Councilman Bern Beecham. Mayor Judy Kleinberg gave her State of the City Address today. There are many things that the City of Palo Alto has to be proud of, including being the number one city in America for recycling and the new Green Ribbon Task Force on Climate Protection.
However, like many cities across California, Palo Alto must manage their cost of government or risk dipping into reserves or losing cherished community services. Currently, Palo Alto’s labor costs are about 66% of their budget, and this percentage is expected to increase to 69% within the next five years. Neighboring cities, such as Menlo Park, are experiencing the same issues. The League of California Cities is calling for city officials to take the initiative on pension and retire health care benefit reform.
While these financial issues are locally-oriented, the state is also facing similar serious financial issues for pension obligations and unfunded liabilities. On a statewide level, we must also manage the cost of government. The Legislative Analyst Office estimates retiree health care liabilities to be in the range of $40 billion to $70 billion “and perhaps more.” Raising taxes is not the answer. Yes, many Democrats also feel this way. Leaders must have the conviction and sense of urgency to take action now so that our state will not face a financial crisis. Common sense solutions, such as raising the employee retirement age or implementing a tiered benefit plan for new employees, should be a priority for leaders at all levels of government.
To read the article about the League of California Cities and its recommendations, please click on this link: