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Original post made
on Apr 9, 2012
This looks like a long term problem - total revenues are anticipated to grow by $1.8 million next fiscal year and total expenditures are projected to increase $2.8 million including the growth in employee costs of 2.3 million. If Mountain View continues to compensate public employees with salary, benefits and retirement that vastly exceed those of private industry, Mountain View will follow Vallejo into Bankruptcy.
So I guess the recently retired Kevin Duggan got out while the going was good with a fat pension and left us all holding the bag.
It's funny how all this comes up AFTER he's gone.
Every government run organization will be bankrupt soon. Even the water agency is now requesting additional money (i.e. Taxes) to make up for the bloated pensions.
How can you hire when the retired person is making the same money doing nothing. Oh wait, i forget, they come back to double dip.
Seems like they just don't get it.
Public employee benefits and pensions are not the problem. We could afford them before we lowered taxes on corporations and the most wealthy people in our country (namely the 1% or even 0.01%). If we were to raise taxes (on those most able to pay) we would not be forced to take from the crucial public services that everyone needs.
If we get rid of pension funds, the need does not go away. Either our public employees, who have given a lifetime's worth of employment, will live in poverty in their golden years or the family will pick up the tab (causing further hardship and a decreased standard of living, and further pull on the economy.)
The money for local governments nationwide must come from those who are most able to pay, the unbelievably rich corporations and people that take advantage of public services such as those provided by the local police and fire departments.
Pensions were never meant to be your full salary. When pensions started it was like 15 to 20% of your pay.
By the time someone is ready to retire, they should have all there major expenses already paided for, such as house, boat, and everything else that is needed.
20 years service is not a lifetime. If they can come back and double dip, then the retirement age is way to low.
Taxing the wealthy is a small solution, but the real problem is all the government WASTE, from pension, double dipping, to paying outrageous prices for art, etc......... the list goes on and on and on.
Sabrina -- some of the public workers collecting pensions ARE the 1% -- these packages are increasingly worth $3-4M.
Just those making pensions of $100k+/year in Mountain View account for over $4M in annual costs:
And this is just the start.
The idea that we, the people of Mountain View, "owe" anyone a pension for the rest of their life makes no sense.
I've been working for 20+ years now. Does someone owe me a pension? No. And we can't all work for the city.. who'd be left to tax?
I speak from direct experience on this one. I worked for the City for 5 years. What an eye opener.
Have you looked at what we pay those people? It looks like every cop makes AT LEAST $106,000 a year. That's not including overtime, which public employees are very good at milking to no end.
No matter how much you want to tax corporations and the ultra rich, spending and pensions need to be brought under control.
The basic truth is you can't spend more than you take in.. for very long.. but thank goodness the city just bought a fleet of shiny new fire trucks. They'll look good sitting in stations we can't afford to keep firemen in.
Those are some mind-boggling pensions in the link above. And many of these people have not even hit 60 yet.
Taxing the rich and corporations for the percentage of the working populations that milks such pensions is just an absurd idea as if taxes were only meant to keep a privilege few in a position of wealth in retirement.
Ned: not only is the current list mind-boggling, but it's growing significantly every year as the benefits have been increased and we're just starting to see the waves of new retirees with these golden packages.
And you're right that many are under 60 -- Michael Young retired at 52 and is making $174,000/year in retirement (and I believe it adjusts with inflation). That's equivalent to a $3,500,000 401k fund. Someone in the private sector would need to SAVE over $80,000/year, after taxes, starting at age 22, to be in that position -- on top of their salary.
Sabrina: still think pensions aren't a problem?
The scary part is that City Manager Daniel Rich is only looking for $600,000 in concessions from the unions. We will be having this same conversation every year until Mountain View has to declare bankruptcy under the weight of the unions.
A reasonable retirement is not the problem. We had this problem in Social Security several decades ago - too early retirement for too long lived retirees. (there is also the 90% retirement rate problem with public safety employees). Like Kevin Duggan, I believe the new city manager is trying to adjust this FUNDAMENTAL problem in stages. But will the Council, which often has a much shorter time schedule, be serious about this? I hope they will! I would agree with Nick - there has to also be a ratcheting up of retirement age - and a slow ratcheting down of the % pension.
Consolidation of Public Services is one obvious step. It is done in Sunnyvale. Consolidation with Palo Alto - Sunnyvale public services? A much bigger savings - but a much bigger local control issue.
Agree with most that pension form is required, in order to make it a sustainable component of the City's budget. Also agree that making the changes slowly would be wise, as drastic changes may have unintended consequences. We got ourselves into this mess over many years, and it seems reasonable that it will take a requisite amount of time to extract ourselves out of it.
But there should be no question as to the need for pension reform. The appetite for free money is insatiable, and if we don't get this under control now, it will only get worse.
"This $30 business charge, to the incredible companies we have, is almost insulting to them," said council member Laura Macias, ..., which member Jac Siegel called "antiquated" and in need of a "major overhaul."
Ronit Bryant also said the fee -- which the city manager also referred to as a tax -- should be examined.
"When we have companies "atually makign" (UGH) a lot of money, we as a city are not sharing in that," Bryant said.
"We should be leaders with that," Siegel said of changing the fee.
Besides the spelling errors, not sure which members are more insulting? Nice to have these companies in Mtn View. Maybe the council can scare them away.
Wow! $3000 for a library restocking fee! Something tells me the city is not trying very hard.
"Besides the spelling errors, not sure which members are more insulting? Nice to have these companies in Mtn View. Maybe the council can scare them away. "
Even if the City increased the business license fee 100x for Google, I doubt that is going to scare them away.
A $30 business license fee for a company like Google is quite silly, any which way you look at it. Other Bay Area Cities are utilizing a progressive scale, tied to payroll size, to determine the appropriate fee. Cheapest I've seen is $25 and the most expensive $500.
Seems to me having a sliding scale makes more sense.
Even charging Google 100X ($30,000) isn't going to put a dent in our budget issue.
The biggest expense for the City is its employees. Aint no other way to look at it.
These employees are killing us and it's time to make some deep cuts.
I don't know where to start. Corporations are getting away with taxes and getting lot of generous tax subsidies. And businesses get tons of tax deductions and end up paying zero taxes or get a nice tax refund. And the employee unions think they deserve more for working less and the state/city employees are known for their inefficency and lethargy. No need to emphasize on that since it is very apparent. And they need more raises every year with more benefits for doing less. its really sickening. And these local politicians get elected with these labor unions support and don't really care about the completely powerless citizens like me who can't do anything about anything except posting comments online. Real Democracy is dead and common sense is out.
Here comes the Second French Revolution....
I can't friggen believe Council Lady Bryant's comments...
"We have (Google) making lots of money, and we are not sharing in it"
OMG... what a friggen Marx/Lenin/Obama comment.. Just 'cuz a local merchant (albiet Google) is wonderfully successful, what the hell is our Council doing taking it away ? Wake the heck up MtnView....the "TAKERS" are on the loose...
HEY.. Maybe we should look at EVERY business in town, and if they make any profit, let's tax the heck out of them...
Smart stuff Council.... Enjoy your getting booted off next election (Inks and Means, get to stay on )
I think every employee, private as well as public, deserves to have a comfortable pension. But I believe it's best if City (employer), employee, and Federal Government (social security), all three share responsibility: 401(k) with some employer contribution (and, after all, there is a tax benefit so the government contributes too); plus social security (a government program supported by both employer and employee taxes); plus a modest pension paid by the employer.
City and State governments are stuck on the employer-only paradigm and the pain is finally coming. I agree it needs to change, but just cutting the size of the pension will not do it and it's not a good idea from the employee's point of view. The City should try switching to the Federal system: a modest employer-paid defined benefit pension plus social security plus their version of 401(k) with a small matching contribution by the employer. I also strongly recommend that the City should not renege on its existing pension contracts.
But even that will not be enough. The main retirement age of social security must increase again. It's currently set to top out at 67 in a decade or so; it needs to go higher. Also, it's wrong for there to be an upper limit on the social security tax. Investment income is not subject to the social security taxes but all wages, even high wages, should be.
I think the retirement age for the employer-paid pension should top out at 50 years of service and be proportionally less for lesser years of service. And, by "top out", I'm not talking about as much as 90-100% of high-year wages; I'm talking about a modest pension to supplement 401(k) and social security. But I do think that, like social security, the employer-paid pension should increase with inflation.
Finally, the tax benefit for 401(k) contributions should not go beyond 10% of wages for the employee's contribution and I don't think the employer should need to match more than 5%. But I do not think 401(k) withdrawals should have to start at a preset age. A well-managed 401(k) will also increase over time but the weakness of 401(k)s is that they are often poorly managed.
I have thought for a long time that the internet companies are not paying there fair share, we need a way to increase the taxes they pay but not so much as to drive them out of town. Let's start by checking with other cities and then talking to directly with the companies getting what is essentially a free ride.
Doug Person's comment on the evolution of Federal pensions is interesting. I'd forgotten about that. (but George of Rex Manor is out of touch with our city's (l)Libertarian percentages) What can we control at the local level? I'm not sure if city could 'opt-in' to the federal Social Security system, I'd guess that is precluded by state statute. RESEARCH by someone would be enlightening.
YES, a progressive BUSINESS LICENSE FEE, based on employee size categories (ie. impact on the city) is really needed (IMO). A home business pays the same as Google! Incredibly stupid!
Now - what would Council hopeful (presumptive business-friendly candidate) McAlister say?
Let's tax the heck out of Yahoo, Google, etc... and then wonder why in five (3-4 2 ?) years they move to either the valley or nor.cal..
Boy we sure got our bucks out of them...
Yes, a tax based on the number of employees, cuz they drink more water, use police and fire, etc.... but damn., let the companies earn what they can.
Hello Greece and Great Britan.
Google already pays nearly 5% of the total property tax in Mountain View.
Let's recall Ronit -- she's out of touch.
"Now - what would Council hopeful (presumptive business-friendly candidate) McAlister say?"
I assume you are kidding. He may own a business but this guy is not business friendly. Check out his voting record on development and business on the EPC. Staff is very worried this no-growther wants to take Mtn View back to the 1950's
Of course pensions are the problem. Back in the day we didn't have "3 at 50" or... saving up vacation and cashing it all in your last year so you get guys like the recent Palo Alto PD sgt earning $400K his last year. Why (not how, separate question..) do you think he did that, hmmm?
"Google already pays nearly 5% of the total property tax in Mountain View.
Let's recall Ronit -- she's out of touch."
Speaking of being out of touch, what on earth does paying property taxes have to do with paying a business license fee?
The issue at hand is the business license fee, which currently is a flat fee of $30, regardless of size of business. What's being discussed here is modifying the current fee so that it scales, perhaps to a metric like payroll size.
It does not make sense for Google to pay the same fees for a business license, than Mom and Pop's local corner store.
Sort of the same argument that Warren Buffet is advocating, when it comes to the effective tax rate for billionaires.
"Let's recall Ronit -- she's out of touch."
I'm also concerned with how frequent people are calling for recalls, because they don't agree with a position taken by an elected official.
The strength of a democracy rests in an educated electorate that participates in the political process AND respects the rule of law.
Recalls should be reserved for instances where elected officials violate the public trust by doing something criminal; it shouldn't be raised every time they do something that doesn't align to your opinion.
Second guessing and backtracking on our politicians is as harmful to the democratic process, as politicians doing the same to us.
Its a sign of maturity to take the good AND the bad, at least until the next election when you can again vote your conscience.
The point about Google paying 5% of property taxes is that they're already paying the largest single portion of Mountain View's budget than anyone else. So when recall-worthy Ronit says "When we have companies actually making a lot of money, we as a city are not sharing in that" -- she's completely incorrect.
Why do we even have a flat business tax? We probably spend more than $30 in city employee time just processing the form.
We should recall Ronit because she's incompetent, offensive to seniors, and focusing on drive-thrus and plastic bags rather than bloated city costs and rising crime.
Relay this message to her, since you must be friends -- no one else would defend her crazy statements and misguided priorities.
If I apply your type of logic (and you are definitely reasonable) to the escalation or city pensions and benefits and perks, would you agree that they are out of hand and unsustainable and, when city pensions are compared to private pensions and then compared to how much of a business fee Google pays in comparison to small business, the entire system is an absurdity?
So when is the council going to face the music on pensions? Because something tells me that they are poking at every fee revenue stream they can find in an effort to save their pensions and nothing more. In other words, they want Google to help sustain the off-balance city pension liabilities. No increased revenues streams from a business fee will go to improving city services.
"Why do we even have a flat business tax? We probably spend more than $30 in city employee time just processing the form."
Um, that is precisely why I think a progressive business license makes sense. It makes no sense for the corner market to be paying the same fee that a company the size of Google does. As I've pointed out earlier, there are Bay Area cities that currently charge a progressive business license fee, as cheap as $25 and as expensive as $500.
Paying your property taxes does not exempt you from paying any other legitimate tax or fee. Just because I pay my fair share of property taxes for my home, doesn't mean I get to turn around and say, "sorry, I gave at the office already", and refuse to pay the parking meter.
"We should recall Ronit because she's incompetent, offensive to seniors, and focusing on drive-thrus and plastic bags rather than bloated city costs and rising crime."
Those are grounds for not voting for Mrs. Bryant during the next election. Feel free to actively campaign against her if you like.
However, they are not legitimate grounds for recalling an individual from public office. The fact that you are so quick to employ the recall mechanism tells me at best you don't know the significance of the law, or at worst, you are co-opting the law for your own reasons, regardless of its propriety in this situation.
"Relay this message to her, since you must be friends -- no one else would defend her crazy statements and misguided priorities."
McCarthyism was done away with in the 60's, no need for you to bring it back.
I have not agreed with Mrs. Bryant on many issues while she has been on the City Council, but the fact remains she was voted in by a sizable portion of Mountain View residents.
In other words, she represents a portion of our community that has an equal right to think you are off your rocker.
If I apply your type of logic (and you are definitely reasonable) to the escalation or city pensions and benefits and perks, would you agree that they are out of hand and unsustainable and, when city pensions are compared to private pensions and then compared to how much of a business fee Google pays in comparison to small business, the entire system is an absurdity? "
Yes and No....
YES, the pension/benefit issue for the City needs to be addressed. I've said as much here:
NO, this does not in anyway take away from the issue of the business license fee. The 2 issues are not connected, and should be treated separately.
The purpose of increasing the business license fee for companies like Google should be to generate a reasonable/fair fee structure for all businesses in Mountain View from the local corner store to the internet giant. It should not be motivated primarily to raise funds. However, if in the process of changing the fees, the City sees an increase in revenue (in this case I would guess will be incremental at best), that is tangential to the issue at hand.
With the projected shortfalls ahead, and salaries and benefits being the largest component of the City's budget, its obvious that cuts to services alone will not solve the problem. But that doesn't mean the City should stop refining its services and fees.
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