New research by the International Federation of Professional and Technical Engineers Local 21 released Thursday is encouraging local Bay Area governments to utilize already existing funds and increase revenue in order to avoid cuts and layoffs during the region’s COVID-19 economic recovery.
The report, “Bay Area Public Services in the Era of COVID-19: Lessons from an Era of Austerity,” used data from the cities of San Jose and Oakland, as well as San Francisco, Santa Clara and Contra Costa counties,
during the 2008 Great Recession.
According to the report, cuts made to those cities and counties in 2008, like benefit reductions, layoffs, furloughs, and unfilled positions, as well as cuts to public services like housing, education and transit, resulted in more than $3.6 billion in reserves combined over the past decade.
IFPTE researchers believe the reserves could be used to avoid layoffs to public service workers and absorb any economic shock created by the pandemic, but they said additional revenue will also be needed to expand
public services and staffing to pre-2008 levels.
The Bay Area cities and counties included in the study cut some 17,500 public service jobs during the 2008 recession and a portion of those jobs remain unfilled. Collectively, the municipalities remain below pre-2008
staffing to population ratios by nearly 7 percent, according to the report.
“As the quality of these jobs declined because service loads were so high, at the same time, agencies were trying to build reserves so that we could be prepared for the next recession,” said Kristen Schumacher, co-author of the study.
As a result, she said, “Wages ended up stagnating, employees ended up paying more for their health care, their take home pay went down and it made it harder to hire people, even when some of the economic recovery
started to impact budgets. And that’s where you get these huge (job) vacancy rates, in places like Oakland and Contra Costa.”
“Post-Great Recession, the public sector made a series of policy choices which resulted in a longer and slower recovery. It’s imperative that our decision makers today make a different set of choices, so that public
services are maintained, particularly in light of this non-economic shock, which is really a public health emergency, and that public services are funded and available for those who particularly need them at his time,” co-author Timothy Mathews said.
“This time, we know what we did before and it didn’t work, so we need to do things differently, and that means use our reserves; that means raising revenue, that means maintaining services,” he said.
In order to create more revenue for local governments to use to raise staffing levels and funds to support public services, the report recommends changes at the state level that address California’s property tax
system, like making corporations pay higher taxes.
The move could recapture $4.2 billion for the entire Bay Area alone, and $11.4 billion statewide, to support economic recovery, according to the report.
Gus Vallejo, IFPTE Local 21 president, said in a statement, “The past few months have highlighted the fact that local government budgets — and their reliance on economically sensitive tax revenues in particular — lack the resilience needed to sustain services in a contingency like this pandemic.”
My daughter just moved from SF to Oregon.
Translation:
You know how we drove everyone onto unemployment and destroyed their jobs? We don’t want that to happen to us too, so we are going to raise your taxes. Also, we’ll soak the corporations, just to make sure they haven’t missed the message that we want them to leave and take their jobs with them.
Sincerely,
Your government betters.
I skimmed their report. It is a bit strange. Their answer to the recession is to hire lots of city, county and state workers and that those increased incomes and spending would, according to them, improve economic growth and end the recession. One highlighted example is the lack of building inspectors. So, we can apparently grow our economy back to normal by hiring lots and lots of building inspectors. Sounds like a plan.
Wow thanks for the cliff notes version! Whoever wrote the report then is government workers are being laid off (Concord for example) or getting pay cuts ( State of CA employees pay cut over 9%). So whoever wrote the report needs to rethink where jobs will come from!
The 2008 furloughs and cuts to a lot of regulatory services resulted in a far slower economic recovery. For example, in Alameda county, huge cuts to building code inspectionand enforcement kept a lot of construction projects from moving ahead or being approved. This resulted in huge backlogs that took years to clear, and contributed to some of the housing shortages in the Bay Area.
That’s income and jobs lost just to one department’s cuts.
Lizzee: In the 2008 financial crisis, housing prices on average fell 30% and stayed at that level for three years. There was much lower demand for housing and so less housing was being built. This was not due to the lack of inspectors. The collapse of housing prices triggered a crisis in banking from their derivatives exposure, and these banks in turn were in no position to be lending. It was a mess. Builders cut back due to low demand, consumers cut back due to uncertainty and lower income, and banks were hesitant to lend. Your story of a lack of building inspectors would point to some sort of bottleneck and higher prices, but prices stayed at this 30% lower level for at least three years and only slowly recovered after that.
The overall theme of that union’s paper is to claim the road to economic recovery is best through a sharp increase the public workforce of city, county and state workers. It appears rather self-serving, rather than a real solution. Also, many of us believe the housing “shortage” is really just the problem of too many workers being encouraged to relocate here. Building more housing is like throwing gasoline on a fire. Many of us do not want more housing. Do you remember how “fun” was to squeeze onto BART 6 months ago?
First in a series press releases from various stakeholders,
to condition voters into approving new taxes ? ?
A city has to provide a set number of services to each developed parcel. Cities like one east of Pittsburg allowed smaller square footage dwellings to be built on postage stamp sized lots resulting in lower property tax revenue.
Then doubled and tripled down on same flawed premise. Thereby ensuring a minimal cushion between revenue and city services costs.
Cities with larger homes on generous lots ensure a large cushion in event of an economic downturn, while reducing city service costs because of fewer parcels.
Blame belongs to city councils and staff for approving those projects.
Using 2008 recovery will prove wrong, vast difference between a career community organizer / career politician with zero large business experience.
Am expecting a V shaped recovery, because obama and biden are no longer in office.
https://thehill.com/blogs/congress-blog/cardozas-corner/198861-the-professorial-president