Thursday, March 29, 2012
Grupe puts Stockton's shortfall into perspective/The Record
STOCKTON - Fritz Grupe, chairman of the Business Council of San Joaquin County, weighed in Wednesday on Stockton's bankruptcy balancing act.
"We need to have a lot more education," he said during the council's and the San Joaquin Partnership's annual breakfast meeting.
Then Grupe provided that education, reeling off a litany of the financial shortfalls.
Federal: The U.S. government is amassing debt at the rate of $1.7 trillion a year, or $14,500 per household.
State: Sacramento faces a $12 billion shortfall next year, or $1,000 per California household.
City: Stockton's projected shortfall of $20 million to $38 million would amount to something like $200 to $400 per Stockton household.
And Grupe challenged his audience to name any state or federal official who has an active proposal to close those gaps.
"The city of Stockton does have a plan, and the politicians have stepped up," Grupe said.
Tools to reverse the city's course, he said, are few.
Officials could choose to cut police and fire services, which constitute 77 percent of the city's discretionary budget. Or they could reduce employee salaries and benefits, but that would only go so far. Slashing retiree health benefits would be difficult to accomplish. And the city could cut or reduce payments on its outstanding debts or raise taxes.
None of those approaches are easy or painless, but they do offer a solution, Grupe said.
"Is there uncertainty out there? For sure," he said. "Does anybody need to be afraid? No, nobody needs to be afraid."
The city will continue to operate. More than two-thirds of its budget is nondiscretionary spending, covering activities such as utility services and the bulk of public works and community services programs.
"What we have is a crisis of confidence. We don't have a crisis of opportunity," Grupe said, reflecting on other speakers' comments about San Joaquin County's assets.
Those assets include a strong transportation infrastructure, which includes Stockton's seaport and airport, two major railroad intermodal yards, and two major north-south freeways, said Mike Ammann, the partnership's president and chief executive.
Dave Renison, president of the San Joaquin Taxpayer's Association, countered later Wednesday that everything possible should be done to avoid municipal bankruptcy. His association has asked the state controller to audit Stockton's finances.
"We may come out of it stronger in the end," Renison said. "How long will it be before that happens, if it happens? How much worse will things be when we go from point A to point B?"
Pointing to the two giant port cranes standing across the Stockton Deep Water Channel from the Stockton Golf & Country Club where the meeting was held, Ammann said, "The eyes of the world are on this inland port" and its plan to launch a federally funded project to begin shuttling cargo containers on barges between Stockton and the Port of Oakland.
And the county, through its Measure K sales tax program, is further expanding county infrastructure with $1.5 billion in projects, both now under construction and with more in the pipeline.
"That's just tremendous," Ammann said.
Stockton City Manager Bob Deis traveled Wednesday to Sacramento to meet with the staff of Gov. Jerry Brown. Deis was not available for comment, but a city spokeswoman said the two parties discussed Stockton's finances.
The governor's office
said city officials requested the meeting. Brown was not present.
Staff writer Scott Smith contributed to this report.
Contact reporter Reed Fujii at (209) 546-8253 or email@example.com.