Dan Walters: Expediency undermines California governance
09/23/2012 12:00 AM
02/26/2013 8:19 PM
The true bane of good government isn't corruption. As unseemly and intolerable as it may be, corruption – politicians taking payoffs – usually has only relatively minor and short-lasting effects.
The more insidious enemy of governance is expediency – doing something, even with benign intentions, without considering long-term consequences.
It would be fair to say that most of the civic ills that afflict California result from voters and the politicians they elect making snap decisions.
The syndrome's apogee – or nadir – was the Legislature's unanimous approval in 1996 of an ill-conceived, poorly designed and misnamed "deregulation" of electric power.
Its assumptions were faulty, and within a few years, one major utility had been driven into bankruptcy and another came very close to insolvency.
The state was compelled to spend billions of dollars to keep power flowing. The plan's advocates said it would reduce Californians' power bills, but they increased instead.
As the very shortsighted energy decision was still playing itself out in 1999, the Legislature did it again, enacting a sweeping increase in state employees' pensions on blithe – and fallacious – assurances from the California Public Employees' Retirement System that the boost would cost taxpayers nothing.
Taxpayers are now shelling out many billions of dollars each year to pay for that spasm of expediency.
The annual state budgets are monuments to shortsightedness, as well, and the expediency virus also afflicts local governments. Several California cities have filed for bankruptcy in recent years. A number of school districts and community college systems are upside-down, including a bizarre implosion of San Francisco's community college system. They wagered that they could spend on employee salaries and benefits, civic improvements and other goodies and that fate would provide the wherewithal.
More recently, we've learned that dozens of California school districts have issued construction bonds that postpone repayment for decades, thus incurring enormous interest costs.
The poster child is Poway Unified School District in San Diego County, which deferred payments on $105 million in bonds until 2033 and by 2051 will have paid $1 billion in interest.
However, at least 50 other districts throughout the state have used the same kind of "capital appreciation bonds." They are the public equivalent of the variable interest "liar loans" that crippled the housing industry, and those who voted to saddle future taxpayers with enormous debts should be ashamed of themselves.
Treasurer Bill Lockyer has indicated he wants the Legislature to restrict such foolishness. But could – and should – a Legislature with an equally sorry history of brain-dead decision-making tell others to shape up?
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