San Benito County does not have a workable financial strategy. If you are invested anywhere in the county as a resident, a business, or homeowner, this situation threatens your future; therefore, you have to act to make changes. It makes no sense to wait until the crisis is upon us to finally act, it could be too late.
I have an interest in keeping the county economically healthy – I live here and to make my life better the county has to enable businesses that generate jobs to employ its residents, provide library and other cultural services, educate its children well, care for its seniors, provide for public safety, maintain the roads, and an almost endless list of other responsibilities. All that costs money – lots of money – and we generate very little.
During the heyday of the housing bubble, 2005-2007, the three years prior to the Great Recession, San Benito County’s revenue averaged $68.4 million a year. In the recession over the next six years, 2008-2013, the county’s revenue averaged $67.6 million a year; that is a decrease of less than $1 million per year on average; not much.
However, it was expenditures that really changed. From 2005-2007 county annual expenditures averaged $62 million resulting in a $6.6 million annual surplus, but from 2008-2013 the county’s average annual expenditures jumped $12 million a year to $74 million resulting in $6.3 million average annual deficits.
Since 2008, the total county deficit has been almost $38 million. If we ran a $6 million surplus a year from now and on, it would take us more than six additional years just to get even. Unless we do something different, we are not going to run a surplus at all. The reason is simple; during the recession we also took in an average increase of more than $7 million a year in “aid from other governments” and the aid is being scaled back because it was all borrowed money.
We, the taxpayers, will repay that debt directly to the federal government, part in higher taxes, and part in lower services. When you factor in that additional help, the county as a going concern actually lost more than $13 million a year average for six years, but let’s just make believe the borrowed money was a gift and deal with financial statement, the reality is too depressing.
Where did the money go? In round numbers, an average of $28 million a year went to Public Protection, $20 million to Public Assistance, and $10 million to Health and Sanitation. That’s an average of $58 million a year in those three items alone – will those expenses be scaled back? I don’t see how, in fact the Sheriff’s Department is severely understaffed.
A major issue is that we do not actually control the costs of most of what we do; we are in competition with wealthier areas and locked into many long-term, legal, state and federally dictated expenses. Since our average annual revenue was $68 million, that leaves only $10 million a year for everything else – general government, roads and facilities, education, recreation, capital, and debt service.
There is no reason to leave this county poor, there is no nobility in having everything upside down – high unemployment, low income, high housing costs, low educational achievement, high taxes and low levels of service. Economic development has to include a new strategy for population growth or it cannot happen; we have to attain critical mass as soon as possible and start planning for it immediately. We have what people want and are willing to pay for – great housing locations.
If we make sure they pay for all of it, as we should, it won’t cost the taxpayers a dime – it will boost the property tax intake and support the things we need. Our current problem is that we are trying to spread the enormous overhead cost of government over too few people of limited means. There will be the ever-present fear mongering about outsiders, but those who stay because it’s good will see the county as home, and you don’t mess the home you love. The primary opposition comes from those who are doing the best, they believe they are insulated from the deleterious effects of bad fiscal management, but they are wrong.
The alternative is that a large part of the county and its population will become a backwater, merely a stopover for those on the way up until they can afford to live somewhere else. Those on the way down, or the poor, will just be stuck with no prospects; we will become a ward of the state. There will be no interest or investment in the community because they will have no attachment to a county that provides them the bare minimum of service and just doles out federal dollars.
It’s a formula for big trouble and the worst part is that a substantial group of the people who want to keep it that way do so for a myriad of selfish reasons including maintaining political control.
Marty Richman