When it comes to this election, Silicon Valley voters must keep their focus on our fiscal future.
For the last decade, our region and state have been on an economic rollercoaster, with enough twists and jolts to cause whiplash. When the economy was soaring high, elected leaders spent tax dollars lavishly on new programs and generous compensation for public employees. Then, when “boom” turned to “bust”, we were forced to tighten our belts and cut important services at a time when they were needed the most.
The effects have been particularly severe on local government. In San Jose, we’ve made cuts to all city services, drastically shrunk the size of our workforce, and asked all of our employees to take a ten percent pay cut and pay more for benefits. While San Jose’s problems have been more visible than others, all Silicon Valley cities are experiencing similar challenges.
That’s why it is critical for voters to scrutinize candidates’ stances on the most pressing issues affecting our long-term fiscal health.
At the top of this list are skyrocketing public employee retirement costs. The State of California currently spends billions of dollars each year on pension and retiree healthcare benefits. San Jose has seen its retirement costs triple over the past decade, and other Silicon Valley cities are experiencing significant increases in their annual retirement contributions. These costs have become an increasingly large drain on government budgets and services, and have even pushed a few cities into insolvency.
While some progress has been made at reining in public employee pension costs, the upcoming election could have a huge impact on the ultimate success of pension reform. For example:
San Jose voters approved a comprehensive set of pension reforms with nearly 70% of the vote. However, city employee unions are trying to stop implementation of these reforms by changing the makeup of the City Council. They have poured in huge amounts of money to defeat Councilmember Rose Herrera, who has been a solid supporter of pension reform and fiscal responsibility.
The State of California recently adopted a modest set of pension reforms that also apply to most other Silicon Valley cities (who are part of the state’s retirement systems); however, state leaders have acknowledged that additional changes are needed. Public employee unions have fought pension reform tooth-and-nail and have been active in elections for the state legislature, where the battle for pension reforms will continue to play out.
These dynamics underline the importance of supporting candidates who are willing to stand up to the powerful unions in order to solve this enormous problem.
Voters also need to scrutinize candidates’ plans to grow our economy. Protecting our fiscal future will require us to attract and retain growing companies that create jobs for our residents and generate new revenues for state and local governments.
Unfortunately, keeping businesses and jobs here in Silicon Valley has been a monumental task given that many other states and countries offer major financial support to help companies relocate and expand. This has been exacerbated by the State of California’s decision to eliminate Redevelopment Agencies, which were the main economic development tool available to cities.
We need elected leaders who understand the connection between economic development and our long-term fiscal health. We need elected leaders who are committed to making Silicon Valley a competitive place to do business. And we need elected leaders who will make it a priority to devise new tools to spur economic growth.
Silicon Valley voters can take a step towards fiscal stability during this election. Make sure the candidates you vote for understand the complex problems facing our region and the state. Ask the tough questions:
- What services would have to be sacrificed if we don’t fix our fiscal problems?
- What’s the true size of your city’s/county’s/school district’s pension costs and unfunded liabilities – and how much will those numbers grow without reform?
- What is the full impact of a company’s decision to build its next factory outside California?
And just as importantly, make sure they are willing to do something about it. Elected officials are constantly under enormous pressure from special interest groups, who spend vast resources to support candidates who carry their water and attack those who stand up to them. As a result, our elected leaders have long been prone to ignoring big problems and kicking the can down the road to the next generation.
Now is the time to demand real solutions to out growing fiscal problems. We can’t continue mortgaging the future of our children and grandchildren. And it’s up to all of us to hold our leaders accountable and vote for candidates who will protect our fiscal future.