Milestones
By Miles H. Barber

A free fall in the stock market does not signal the end of the financial world.

However, it does send up a warning flare to be prepared for a volatile and uncertain period.

What should we do?

For one thing, do not follow the leadership example from Washington.

Borrowing our way out of debt doesn't work for families and apparently only for governments.

That's because they always have the ability to print money.

Local governments like Santa Clara don't have the luxury of printing money so we need to take a more judicious approach to our budget.

That means containing costs now and dealing with expenditures for the immediate future and not postponing the serious issues like pension reform.

The City Staff and Council have been attentive to bringing our costs under control for this year's budget considering the out of whack salaries and benefits we are contractually obligated to pay.

Long term, we are still headed for the precipice of poverty without dealing with our unsustainable salary and pension increases.

While our Council pacified the Police Department with furloughs for the immediate future, they have not taken on the white elephant of future costs.

While every politician hopes and prays for good economic times (especially during reelection) the current economic climate dictates different rules of government operation.

Let's face it. We got spoiled.

We enjoyed 50 years of a growing economy with only a few minor bumps along the way. It was rather easy to dole out tax revenues to our public servants to the point they became incredibly well compensated. Few if any city councils had the financial foresight, political will or backbone to reject the unions demands for more and more.

Since the unions were well organized and well funded they became serious players in the political arena, and many of our representatives at every level of government owed their office to organized labor. So when the unions met in closed sessions to negotiate their next contract they were among friends. Friends they had helped get elected.

The public, who had elected these representatives in good faith, thought those elected would represent them fairly. They went about their own way, going to work, raising their family, serving their church and community, unaware government was growing at an exponential rate.

After thirty years of diligent planning by the unions of building bigger budgets and benefits for their public servant members, the market crashed. What transpired was the transparency of economic tragedy.

In just the past decade unions had been successful in negotiating a 33% increase in pension benefits. In addition, the camouflaged costs of cumulative sick pay, PTO, paid leaves, overtime and disability retirement were all revealed.

These issues have not gone away and they have not been addressed. And honestly, why would a lame duck council like Santa Clara want to deal with such hot rocks of controversy?

The majority of our current council will be gone next year. There will be four new members elected which will either keep the same political environment and philosophy, or we will have a split council with possible gridlock or a new council who has the tenacity to face the unions with a strong dose of reality.

While the stock market may not tell us where we are going, it does tell us we are in volatile times.

We must be prepared for this wild economy to be the new normal and that means taking some abnormal actions.

Miles H. Barber can be reached at Scweekly2011@yahoo.com