by Kathy Kerridge
The Benicia Herald recently published a letter questioning the wisdom of spending $845,000 a year on renewable energy for a saving of $50,000 a year. He said it didn’t make sense. If those were the facts it wouldn’t. However, he left out the most important part of the equation.
The city through these projects will save 70% of its utility bill. That is not a trivial amount since the city spends $1.5 million a year on energy. What the city is doing is spending money to save $1,050,000 (70% of $1,500,000) per year in utility costs.
One way or the other we would be spending this money, either on utilities or on the bond. The difference between the cost of the bonds and the utility bill is where the $50,000 per year in savings is realized. This is a conservative figure.
This project also freezes 70% of Benicia’s energy bill. In these days of rapidly escalating costs I think that is the only sensible course of action. I don’t think anyone believes the cost of energy will be going down in the next 20 years in light of the increased demand from developing countries, the increasing costs of extracting fossil fuels, and our reliance for oil on unstable and often dictatorial governments.
Showing posts with label Budget - finance. Show all posts
Showing posts with label Budget - finance. Show all posts
Friday, April 8, 2011
Tuesday, July 14, 2009
A Solution to California's Debt Crisis
Toward a Solution to the Debt Crisis in California: The State Could Walk Away and Create Its Own Credit Machine
By Ellen Brown
Published in OpEdNews, July 13, 2009
http://www.opednews.com/articles/From-Sunshine-State-to-Sub-by-Ellen-Brown-090713-321.html
Four Wall Street banks, which received $15-25 billion each from the taxpayers, have rejected California's IOUs because the State is supposedly a bad credit risk. The bailed out banks would seem to have a duty to lend a helping hand, but they say they don't want to delay an agreement on further austerity measures. State legislators are not bowing quickly to the pressure, but what is the alternative?
In the latest twist to the California budget saga, Citigroup, Wells Fargo, and JPMorgan Chase (which each got $25 billion in bailout money from the taxpayers) and Bank of America (which got $15 billion) have refused California's request for a loan to tide it over until October. Until the State can get things sorted out, it has started paying its creditors in IOUs ("I Owe You's" or promises to pay bearing interest, technically called registered warrants). Its Wall Street creditors, however, have refused to take them. Why? The pot says the kettle is a poor credit risk!
California expects to need to issue only about $13 billion in IOUs through September, and all its Governor has asked for in the way of a loan from the federal government is a guarantee for $6 billion. Total loans, commitments and guarantees to rescue the financial sector and stem the credit crisis have been estimated at $12.8 trillion. But California has not been invited to the banquet. The total sum California needs to balance its budget is $26.3 billion. That is about the same sum given to Citigroup, Wells Fargo and JPMorgan in bailout money; and it is only about one-tenth the sum given to AIG, a mere insurance company. Corporations evidently trump States and their citizens in the eyes of the powers controlling the purse strings. California has a gross domestic product of $1.7 trillion annually and has been rated the world's eighth largest economy. Its 38.3 million people are one-eighth of the nation's population and a key catalyst for U.S. retail sales. When the California consumer base falters, businesses are shaken nationwide. If AIG and the other Wall Street welfare recipients are too big to fail, California is way too big to fail.
Fitch Rating Agency has downgraded California's municipal bonds to junk bond status,triple B. Why? AIG and Lehman Brothers had A ratings right up until they declared bankruptcy. California has never defaulted on its bonds, and it cannot arbitrarily decide to default; the State Constitution mandates that debt principal and interest must be paid as promised. California bonds lost their triple A rating only when the municipal bond insurers (Ambac and MBIA) lost theirs. It was these insurers, not the State of California, that got into hot water gambling in derivatives. The State Attorney General has opined that California's IOUs are valid and binding obligations of the State. In rejecting them, however, Wall Street may have ulterior motives. A lower credit rating can justify investors in demanding higher interest rates. The interest offered on the IOUs is substantially lower than the interest banks can get on triple B rated municipal bonds.
There may be deeper motives than that. Considering the enormous importance of the California economy to the country, and the relatively small sum it needs in loans, the refusal to support the State financially seems highly suspicious, especially when much more has been given to less creditworthy private institutions. The banks say they want to keep the pressure on California legislators to work it out among themselves, but what does that mean? The options are even higher taxes, even more cuts in services, or even more fire sales of public assets; in short, the sort of austerity measures expected of supplicants reduced to Third World debtor status. State legislators are understandably reluctant to crawl into that debt pit. Governor Schwarzenegger has refused to approve higher taxes, while Democratic leaders say further cuts in services could leave some Californians starving in the streets.
The Sun Could Shine Again on the Sunshine State
There is an alternative to that dark future, and perhaps it is to keep the public from waking up to it that arms are being twisted to accept the new burdens quickly. If Wall Street and the Feds won't extend credit to California on reasonable terms, the State could simply walk away and create its own credit machine. California could put its revenues in its own state-owned bank and fan these "reserves" into many times their face value in loans, using the same "fractional reserve" system that private banks use. Many authorities have attested that banks simply create the money they lend on their books. Congressman Jerry Voorhis, writing in 1973, explained it like this:
President Obama himself has acknowledged this "multiplier effect." In a speech at Georgetown University on April 14, 2009, he said:
North Dakota is not suffering from unemployment or feeling the pinch of the economic downturn. Rather, it sports the largest surplus it has ever had. If this isolated farming State can escape Wall Street's credit crisis, the world's eighth largest economy can do it too!
You could also try faxing this article or a letter to Governor Schwarzenegger at 916-558-3160. See http://gov.ca.gov/interact#contact.
Ellen Brown is an attorney and has written eleven books, including "Web of Debt," "Forbidden Medicine," "Nature's Pharmacy," and "The Key to Ultimate Health." Her websites are http://www.webofdebt.com and http://www.ellenbrown.com .
By Ellen Brown
Published in OpEdNews, July 13, 2009
http://www.opednews.com/articles/From-Sunshine-State-to-Sub-by-Ellen-Brown-090713-321.html
Four Wall Street banks, which received $15-25 billion each from the taxpayers, have rejected California's IOUs because the State is supposedly a bad credit risk. The bailed out banks would seem to have a duty to lend a helping hand, but they say they don't want to delay an agreement on further austerity measures. State legislators are not bowing quickly to the pressure, but what is the alternative?
In the latest twist to the California budget saga, Citigroup, Wells Fargo, and JPMorgan Chase (which each got $25 billion in bailout money from the taxpayers) and Bank of America (which got $15 billion) have refused California's request for a loan to tide it over until October. Until the State can get things sorted out, it has started paying its creditors in IOUs ("I Owe You's" or promises to pay bearing interest, technically called registered warrants). Its Wall Street creditors, however, have refused to take them. Why? The pot says the kettle is a poor credit risk!
California expects to need to issue only about $13 billion in IOUs through September, and all its Governor has asked for in the way of a loan from the federal government is a guarantee for $6 billion. Total loans, commitments and guarantees to rescue the financial sector and stem the credit crisis have been estimated at $12.8 trillion. But California has not been invited to the banquet. The total sum California needs to balance its budget is $26.3 billion. That is about the same sum given to Citigroup, Wells Fargo and JPMorgan in bailout money; and it is only about one-tenth the sum given to AIG, a mere insurance company. Corporations evidently trump States and their citizens in the eyes of the powers controlling the purse strings. California has a gross domestic product of $1.7 trillion annually and has been rated the world's eighth largest economy. Its 38.3 million people are one-eighth of the nation's population and a key catalyst for U.S. retail sales. When the California consumer base falters, businesses are shaken nationwide. If AIG and the other Wall Street welfare recipients are too big to fail, California is way too big to fail.
Fitch Rating Agency has downgraded California's municipal bonds to junk bond status,triple B. Why? AIG and Lehman Brothers had A ratings right up until they declared bankruptcy. California has never defaulted on its bonds, and it cannot arbitrarily decide to default; the State Constitution mandates that debt principal and interest must be paid as promised. California bonds lost their triple A rating only when the municipal bond insurers (Ambac and MBIA) lost theirs. It was these insurers, not the State of California, that got into hot water gambling in derivatives. The State Attorney General has opined that California's IOUs are valid and binding obligations of the State. In rejecting them, however, Wall Street may have ulterior motives. A lower credit rating can justify investors in demanding higher interest rates. The interest offered on the IOUs is substantially lower than the interest banks can get on triple B rated municipal bonds.
There may be deeper motives than that. Considering the enormous importance of the California economy to the country, and the relatively small sum it needs in loans, the refusal to support the State financially seems highly suspicious, especially when much more has been given to less creditworthy private institutions. The banks say they want to keep the pressure on California legislators to work it out among themselves, but what does that mean? The options are even higher taxes, even more cuts in services, or even more fire sales of public assets; in short, the sort of austerity measures expected of supplicants reduced to Third World debtor status. State legislators are understandably reluctant to crawl into that debt pit. Governor Schwarzenegger has refused to approve higher taxes, while Democratic leaders say further cuts in services could leave some Californians starving in the streets.
The Sun Could Shine Again on the Sunshine State
There is an alternative to that dark future, and perhaps it is to keep the public from waking up to it that arms are being twisted to accept the new burdens quickly. If Wall Street and the Feds won't extend credit to California on reasonable terms, the State could simply walk away and create its own credit machine. California could put its revenues in its own state-owned bank and fan these "reserves" into many times their face value in loans, using the same "fractional reserve" system that private banks use. Many authorities have attested that banks simply create the money they lend on their books. Congressman Jerry Voorhis, writing in 1973, explained it like this:
"[F]or every $1 or $1.50 which people, or the
government, deposit in a bank, the banking system can create out of thin air and
by the stroke of a pen some $10 of checkbook money or demand deposits. It can
lend all that $10 into circulation at interest just so long as it has the $1 or
a little more in reserve to back it up."
President Obama himself has acknowledged this "multiplier effect." In a speech at Georgetown University on April 14, 2009, he said:
"[A]lthough there are a lot of Americans who
understandably think that government money would be better spent going directly
to families and businesses instead of banks; where's our bailout?,' they ask,
the truth is that a dollar of capital in a bank can actually result in eight or
ten dollars of loans to families and businesses, a multiplier effect that can
ultimately lead to a faster pace of economic growth."
If private banks can leverage deposits into multiple amounts of "credit" on their books, a state-owned bank could do the same thing, and return the profits to the public purse. One State already does this. North Dakota boasts the only state-owned bank in the nation. It is also one of only two states (along with Montana) that are currently able to meet their budgets. The Bank of North Dakota was established by the legislature in 1919 to free farmers and small businessmen from the clutches of out-of-state bankers and railroad men. By law, the State must deposit all its funds in the bank, and the State guarantees its deposits. The bank's surplus profits are returned to the State's coffers. The bank operates as a bankers' bank, partnering with private banks to lend money to farmers, real estate developers, schools and small businesses. It makes 1% loans to startup farms, has a thriving student loan business, and purchases municipal bonds from public institutions.
North Dakota is not suffering from unemployment or feeling the pinch of the economic downturn. Rather, it sports the largest surplus it has ever had. If this isolated farming State can escape Wall Street's credit crisis, the world's eighth largest economy can do it too!
_________________________________________________
To sign a petition that will go electronically to Governor Schwarzenegger and to elected officials in your State, click here. http://www.change.org/actions/view/help_the_terminator_save_california
To sign a petition that will go electronically to Governor Schwarzenegger and to elected officials in your State, click here. http://www.change.org/actions/view/help_the_terminator_save_california
You could also try faxing this article or a letter to Governor Schwarzenegger at 916-558-3160. See http://gov.ca.gov/interact#contact.
Ellen Brown is an attorney and has written eleven books, including "Web of Debt," "Forbidden Medicine," "Nature's Pharmacy," and "The Key to Ultimate Health." Her websites are http://www.webofdebt.com and http://www.ellenbrown.com .
Sunday, May 11, 2008
What has Silva done for us?
Dear Editor:
What has Mr. Silva done for us in the past 11 years?
Health Issues: According to the State, as reported on the County website, Solano has the highest rate of asthma in California. Over my career as a middle school teacher in the County, I’ve watched the number of my students with asthma, increase alarmingly.
Air pollution is a well-known contributor to asthma problems. Recently, the Bay Area Air Quality District gave the County a grade of C (down from B) for summer air pollution and a grade of D for winter air pollution.
Concerning other health issues, a recent Study reported in the Fairfield Daily Republic found that our County ranks 9th for obesity and 6th for diabetes, among counties studied. The article suggested that this could be connected to the fact that we have five times more fast food/convenience places as grocery stores. A note here: some of these fast food/convenience places were built in the past 11 years.
Finally Mr. Silva voted to use tobacco money—NOT on health related issues—but, rather, to build new County buildings.
Transportation: Recently Mr. Silva has said he will work to repair our roads. Great! The problem, though, is that Mr. Silva was supposed to be ensuring that these roads were maintained over the past 11 years. Also, during those 11 years, nothing has been done to improve perhaps the biggest road problem in Mr.Silva’s District: the I-80/680 interchange.
Listening to Constituents: Mr. Silva’s home town is Benicia—yet he removed the only two Benicians who were on the General Plan Citizen’s Panel. In addition, the General Plan Public Outreach Forum—which visited five County locations—skipped Benicia.
Attempt to Raise Taxes: Mr. Silva attempted to raise taxes at least three times. In 2002, 2004 and 2006 he supported Measures E, A and H respectively. Each of these Measures would have increased our sales tax.
Open Space: Mr. Silva was the deciding vote against a Solano Regional Park System a few years back. In addition he opposed Urban Growth Boundary Measures in Benicia (Measure K) and Fairfield (Measure L).
Budget Balancing: Mr Silva claims he has balanced 11 budgets. Yes, the County has had a balanced budget for the past 11 years. The thing is, State law requires a balanced County budget. Therefore, the County’s budget will always be balanced—no matter who sits in the Supervisor chairs.
Crime/Attracting Jobs/Survey Results: Finally, the results of the County’s own Survey, released this month—report that Benicians and Vallejoans are less satisfied with the County than other County residents. Also, despite Mr. Silva’s 11 years in office, the Survey reported that Vallejoans feel the County is, according to the Vallejo Times Herald, “barely doing enough to address” youth crimes, chronic diseases and attracting businesses and jobs. Benicians were also concerned about youth crimes as well as, according to the Benicia Herald, County government organization and environmentally friendly land-use practices.
After 11 years in office, it does not matter what John Silva may say he will do—but what he has done.
Mr. Silva has had his chance. It’s time for someone new, like Linda Seifert.
Jon Van Landschoot
Benicia, CA
What has Mr. Silva done for us in the past 11 years?
Health Issues: According to the State, as reported on the County website, Solano has the highest rate of asthma in California. Over my career as a middle school teacher in the County, I’ve watched the number of my students with asthma, increase alarmingly.
Air pollution is a well-known contributor to asthma problems. Recently, the Bay Area Air Quality District gave the County a grade of C (down from B) for summer air pollution and a grade of D for winter air pollution.
Concerning other health issues, a recent Study reported in the Fairfield Daily Republic found that our County ranks 9th for obesity and 6th for diabetes, among counties studied. The article suggested that this could be connected to the fact that we have five times more fast food/convenience places as grocery stores. A note here: some of these fast food/convenience places were built in the past 11 years.
Finally Mr. Silva voted to use tobacco money—NOT on health related issues—but, rather, to build new County buildings.
Transportation: Recently Mr. Silva has said he will work to repair our roads. Great! The problem, though, is that Mr. Silva was supposed to be ensuring that these roads were maintained over the past 11 years. Also, during those 11 years, nothing has been done to improve perhaps the biggest road problem in Mr.Silva’s District: the I-80/680 interchange.
Listening to Constituents: Mr. Silva’s home town is Benicia—yet he removed the only two Benicians who were on the General Plan Citizen’s Panel. In addition, the General Plan Public Outreach Forum—which visited five County locations—skipped Benicia.
Attempt to Raise Taxes: Mr. Silva attempted to raise taxes at least three times. In 2002, 2004 and 2006 he supported Measures E, A and H respectively. Each of these Measures would have increased our sales tax.
Open Space: Mr. Silva was the deciding vote against a Solano Regional Park System a few years back. In addition he opposed Urban Growth Boundary Measures in Benicia (Measure K) and Fairfield (Measure L).
Budget Balancing: Mr Silva claims he has balanced 11 budgets. Yes, the County has had a balanced budget for the past 11 years. The thing is, State law requires a balanced County budget. Therefore, the County’s budget will always be balanced—no matter who sits in the Supervisor chairs.
Crime/Attracting Jobs/Survey Results: Finally, the results of the County’s own Survey, released this month—report that Benicians and Vallejoans are less satisfied with the County than other County residents. Also, despite Mr. Silva’s 11 years in office, the Survey reported that Vallejoans feel the County is, according to the Vallejo Times Herald, “barely doing enough to address” youth crimes, chronic diseases and attracting businesses and jobs. Benicians were also concerned about youth crimes as well as, according to the Benicia Herald, County government organization and environmentally friendly land-use practices.
After 11 years in office, it does not matter what John Silva may say he will do—but what he has done.
Mr. Silva has had his chance. It’s time for someone new, like Linda Seifert.
Jon Van Landschoot
Benicia, CA
Saturday, April 5, 2008
Fiscal Conservative John Silva?? Facts from the past speak for themselves!
January 24, 1997
Contra Costa Times Editorial -- regretting their endorsement of John Silva...
Contra Costa Times Editorial -- regretting their endorsement of John Silva...
Solano supe’s costly raise
Compared with others they are not underpaid
[Reprint of January 1997 editorial from CCTimes]
Solano County Supervisors did something last week [January 1997] we probably all wish we could do. They gave themselves a 41 percent raise. On a 3-2 vote, supervisors raised their salaries more than $14,000 – from $34,932 to $49, 399.
Supervisors contend they are underpaid when compared to supervisors in other Northern California counties, specifically Contra Costa, Marin, Santa Cruz, Sonoma, Sacramento, San Joaquin and Stanislaus.
This raise is outrageous. First, they aren’t comparing apples to apples. Solano is smaller, more rural and the cost of living is less compared to Contra Costa, for example. Check these numbers. Solano: 2,500 employees, population 375,000. Contra Costa: 6,800 employees, population 868,600, supervisor’s pay $50,328.
Although Alameda wasn’t used in Solano’s comparison, here’s how it’s numbers compare: 10,000 employees, 1.3 million people, supervisor’s pay $63,000.
Besides having fewer people to manage and a smaller population to serve, it cost less to live in Solano than Contra Costa and most of Alameda. And it’s far less than Marin.
Disappointingly, newly elected Supervisor John Silva of Benicia voted for the raise. Silva won the Times endorsement when he told our editorial board before last spring’s primary that he would consider hiring freezes, early retirements and even reducing supervisors’ pay to meet budget demands. Silva’s vote on this issue makes The Times regret its endorsement of him.
Besides embarrassing themselves, the supervisors have opened the floodgates. The county’s largest employee union says it wants equal treatment when its contracts expire in October. They make a good point. Supervisors can hardly claim to be fiscal conservatives now.
If supervisors truly believe they are underpaid – which they aren’t – at least they should have approved the raise incrementally. Supervisors were wrong to give themselves this raise. They should rescind the action and apologize to county taxpayers.
Saturday, November 3, 2007
Benicia Budget Balanced or Not?
by Norma Fox
Is the Benicia Budget balanced? Who knows. Maybe it depends on how you look at it. There has been a bit of disagreement about this subject lately. Personally, I’m inclined to think that Council Candidate Tom Campbell may be onto something when he simply points out that since present and projected total expenditures exceed revenue, perhaps we should question whether this is a balanced budget. He has a history of being a great budget watchdog for our city as a former city council member and also as a 4-year member of the city’s Audit and Finance Committee.
Having worked for years in an accounting environment myself, I know something about how reliable accounting statements and budget forecasts can be. Council candidate Strawbridge challenges Campbell’s assertion, saying, “Let’s look at the FACTS.” Well, sometimes what is a “fact” depends on how you define your terms and categories, and what figures you lump together. Also the summary data is only as good as the raw source data it comes from (garbage in-garbage out rule).
We citizens cannot pour through the budget at this level of detail. But I have a lot of trust Tom Campbell’s record of strict fiscal responsibility and discipline and his proven expertise and experience in budget oversight.
Is the Benicia Budget balanced? Who knows. Maybe it depends on how you look at it. There has been a bit of disagreement about this subject lately. Personally, I’m inclined to think that Council Candidate Tom Campbell may be onto something when he simply points out that since present and projected total expenditures exceed revenue, perhaps we should question whether this is a balanced budget. He has a history of being a great budget watchdog for our city as a former city council member and also as a 4-year member of the city’s Audit and Finance Committee.
Having worked for years in an accounting environment myself, I know something about how reliable accounting statements and budget forecasts can be. Council candidate Strawbridge challenges Campbell’s assertion, saying, “Let’s look at the FACTS.” Well, sometimes what is a “fact” depends on how you define your terms and categories, and what figures you lump together. Also the summary data is only as good as the raw source data it comes from (garbage in-garbage out rule).
We citizens cannot pour through the budget at this level of detail. But I have a lot of trust Tom Campbell’s record of strict fiscal responsibility and discipline and his proven expertise and experience in budget oversight.
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