Connecting Values and the Economy Stephen Levy's Economy Blog, posted by stephen levy, a resident of the University South neighborhood, on Aug 6, 2012 at 12:26 pm stephen levy is a member (registered user) of Palo Alto Online
I believe that my family and I are connected to generations past and future. I believe this for living in Palo Alto and for living in this world. That is one of my values.
I am grateful for the contributions of past generations that made Palo Alto a wonderful place to live and raise a family and still a wonderful place to live now. I am grateful for their investmetns and their welcoming of growth and change and diversity.
So in Palo Alto I support investing for the next generation and for continuing to welcome people and diversity. I welcome Stanford as a neighbor and their need to remain competitive as a university, as a medical center and as a center for innovation. As Nancy and I walk through the campus it is much denser than when I was a student with new buildings and residences.
I support welcoming new businesses and new residents within the context of careful planning.
In this case my values are supported by my professional work in understanding the dynamics of the Bay Area and state economy.
My value of investing in education is supported by the finding from my work and the work of others that a skilled workforce is our key competitive advantage and that great schools and universities support our economy and are a necesasary attraction for entreprenuers and families to start and expand businesses and send their children to school in California.
My value of investing in infrstructure to leave Palo Alto and California as good or better than it was given to me is supported by my work and the work of others that infrastructure to move people and goods, to provide water and energy and to have great public facilities that serve residents and businesses is necessary for us to remain competitive in the global economy. This is true in the Bay Area as supported by business leader surveys and true for California.
My value of being a welcoming community whether that be for immigrants or people with different religious or sexual preferences is supported by my knowledge that California has received great economic value from attracting a diversity of people who bring their talent and energy and also different life experience.
So, yes, investing takes money and should be done wisely. And welcoming growth and change brings growth and change, which does not always go smoothly.
But I do not own Palo Alto. I am a visitor here (even 50 years does not change that) and I am connected to generations past and future. Someone must speak for and plan for those future generations who will be the next visitors to Palo Alto. And I know in planning for them I am also planning to keep the economic vitality and energy that we are fortunate to be a part of.
Posted by Kerry, a resident of the Midtown neighborhood, on Aug 6, 2012 at 12:47 pm
"But I do not own Palo Alto".
Absolutely true statement. However, you do promote increased desnity of housing (ABAG), which will be a de facto ownership of large areas of Palo Alto.
Stephen, you are a tax-and-spender. There are few 'visionary' concepts that you do not support. You were very late to the train, to oppose HSR. Your basic argument is that Palo Alto will become less dynamic, unless we follow your 'vision'.
Palo Alto still has the possbility of a very dynamic future, while rejecting your solutions.
Posted by Me Too, a resident of the Adobe-Meadows neighborhood, on Aug 6, 2012 at 2:36 pm
Stephen, don't you also support spending on current amenities and services? "We get what we pay for" was I believe your earlier motto. So is it fair to say that you like spending on, well, everything?
The trick is setting priorities. Sure we spend more on infrastructure and less on amenities? More on education and less on recreation? Or do you believe we should just spend more on everything, as the previous poster implied?
Posted by common sense, a resident of the Midtown neighborhood, on Aug 7, 2012 at 8:33 am
Stephen Levy vision of investing is bigger pensions & benefits for government workers, and more taxes to support those pensions & benefits. He hasn't offered any solution to this issue of pensions & benefits in all his columns.
I've never seen Stephen prioritize, never assess what has worked well, and what has not.
I've also never seen Stephen assess how accurate his previous predictions have been on growth, which he uses to drive his agenda of high density housing, nor the conflict of interest he has since he get paid as a consultant to ABAG.
Posted by Yvette Salander, a resident of Mountain View, on Aug 7, 2012 at 9:09 am
"common sense" hates working class members of our community.
I've never seen "common sense" prioritize, never assess what has worked well, and what has not.
Dude, or dudette: an ad hominem attack on a poster who has the ****s to post with his real name, by an anonymous poster, is useless, trivial and far too frequent to pay much attention to. The only cred an anonymous poster gets is when they post FACTS and offer a solution.
Not a bunch of whiny bs about "SL never does this", "always does that", wahhhh, wahhhh, wahhh...
Posted by Mike, a resident of the Crescent Park neighborhood, on Aug 7, 2012 at 10:16 am
"Investing" sounds so right and sensible, whether it is education, infrastructure or other priorities.
Would that it were. What is hidden behind the term 'investing' are additional expenditures that are often inappropriate and/or excessive.
Until we are spending the right amount on 'investments' to achieve the return on that investment we all expect I will not be for raising or continuing at their current levels the taxes and fees that support the fluff and gold lining that most of our current 'investments' carry.
I won't pay financial professionals excessive fees to manage my own money and I don't leave my funds with money managers that produce inadequate returns. And neither should we with our public funds.
Posted by Crescent Park Dad, a resident of the Crescent Park neighborhood, on Aug 7, 2012 at 11:27 am
Nothing wrong with investing in education, infrastructure, etc., as long as it is within our collective means. In other words: no deficit spending, no negative cash flow.
We cannot assume "better times are ahead" and that any deficit spending will be easily paid off when the economy turns around. That is how both the Federal and State budgets have gone so far off into the deep-end.
I'm not interested in laying blame on any individual or political party on how our government budgets have been so grossly mis-managed. We are, where we are. The important thing to do now is to tighten our belts, plug the leaks and ride out the storm. We can no longer make leap of faith "investments" without the cash flow to support it.
For the time being, we should be in the "pay as you go" mode.
Posted by immune impugnability, a member of the Jordan Middle School community, on Aug 7, 2012 at 11:40 am
Agreed, Yvette wasn't technically correct about the 'ad hominem' attacks, as non disparaged Mr Levy personally ("ya moran!")
However, CPD's post highlights the differences between styles. CPD never attacked the poster, only commented on the various elements of the topic. A couple of the initial posters made blanket assertions about Mr Levy without substantiating their claims:
- "I've never seen Stephen prioritize, never assess what has worked well..."
- "Stephen, you are a tax-and-spender."
When you have no facts to debate the merits of the issue, just impugn the author's position with cliches!
Posted by Michael, a resident of the Downtown North neighborhood, on Aug 7, 2012 at 11:57 am
Mr. Levy doesn't cite a source of the funds he advocates investing in vital infrastructure, although I suspect new taxes are his intended source (please clarify, Mr. Levy).
The funds for such investment should be freed up by putting an end to the gold-plated pensions and bloated compensation packages we are funding for city bureaucrats. Outsourcing city functions away from the union special interests and to the private sector will save millions.
Posted by common sense, a resident of the Midtown neighborhood, on Aug 7, 2012 at 2:38 pm
Please do a web search and cite a post from Steve Levy which gives a prioritization of services, or a post from Steve Levy which shows how accurate the ABAG projections have been (which are based on the consulting work he does), or a post from Steve Levy which provides a solution to the government work pension & benefits issue.
Posted by Kerry, a resident of the Midtown neighborhood, on Aug 7, 2012 at 3:16 pm
Can Stephen Levy name three taxes he opposed, in Palo Alto, over the past decade?
He IS a tax-and-spender.
He is also a man of ideas, and I like that. However, he needs to explain how his vision can be accomplished, without breaking the bank, or distorting the Palo Alto vision of Palo Alto neighborhoods/schools.
Posted by common sense, a resident of the Midtown neighborhood, on Aug 7, 2012 at 5:26 pm
You just proved my point - you can't cite any posts. I think priorities are necessary, pension reform necessary, and you must think those who don't support such ideas are "bad", otherwise you wouldn't think that this is an "attack" on Stephen Levy.
Posted by common sense, a resident of the Midtown neighborhood, on Aug 7, 2012 at 6:57 pm
Nice try but try to stay on topic, and see if you can come up with a Stephen Levy post where he prioritized anything, where he offers any alternative to the looming government worker pension benefits crisis other than raise taxes.
Have you been reading the papers about the 3 cities in California that have declared bankruptcy this year? What can be more cruel to our government workers than a city declaring bankruptcy and then leaving them in limbo on their pension benefits?
Or what about those the continual cutting of services & laying off of employees (eg. Palo Alto Animal Services), so that other city employees can continue to increase thier total compensation via increased contributions to their pension fund?
Isn't it better to have a plan that is sustainable, so that we can keep some of the services we all find useful?
Posted by Helga James, a resident of the Midtown neighborhood, on Aug 7, 2012 at 7:08 pm
try to stay on topic
You want others to do your research for you, yet you won't even fulfill a simple request - your posts that show valid ideas and discussion, rather than just asking leading questions and blasting others from behind an anonymous moniker:
"Yet "common sense" cannot offer any link to her posts offering reasonable solutions from the past, perhaps because as an anonymous poster using a common moniker, she is unable to."
Posted by pat, a resident of the Midtown neighborhood, on Aug 7, 2012 at 8:18 pm
Common Sense: You picked an apt handle. I agree with you. It is not you who “want others to do your research for you.” Your critics don’t want to do any research to prove their own points.
I have no doubt Levy is sincere in his warm and fuzzy utopian blogs about loving Palo Alto. But from what I read, he is a tax and spend kind of guy. His “priorities” seem to be to keep everything we have and pay to add more.
Levy was on the Blue Ribbon Infrastructure Committee. He wrote: “Our mission was to develop funding options that did not involve taking money from other city priorities. Council and residents may choose to reallocate current funding but this commission’s scope and mission was to fully fund the needs we identified without reviewing or commenting on other city priorities and services. …”
That pretty much sets us up for more taxes and/or more bonds: “There was unanimous agreement that the major capital facility investments should be funded by long-term borrowing…” Web Link
Visions are a dime a dozen. Implementing something, building something, actualizing a vision – within a budget! – is a whole different thing.
Posted by common sense, a resident of the Midtown neighborhood, on Aug 7, 2012 at 11:03 pm
The city can save the money if they prioritize; one example is the ongoing police headquarters that first got discussed in 2004, after a grand jury report. City budgets from 2004 - 2012 have totaled roughly $1.15 billion. Chop Keenan offered to build it for the city for between $30 - $40 million back in 2005. If the city had limited it's growth in spending to the inflation rate, and saved the rest for building infractructure, it could have saved enough money to pay for a new police headquarters. Instead, the money went to increase the compensation of many city staff in the form of enhanced pensions (when they voted to make the pensions more lucrative in 2006), and superficial projects, like $250,000 for the Senior games, $50,000 for the "Color of Palo Alto", funding at $150,000/year for an Assistant to the City Manager for Sustainability, funding at $160,000/year for a tree coordinator.
Posted by stephen levy, a resident of the University South neighborhood, on Aug 8, 2012 at 10:38 am stephen levy is a member (registered user) of Palo Alto Online
There is a lot of silliness above about priorities. Most of my posts clearly state my priorities--investing in education, infrastructure and creating great and welcoming communities.
Other posters seem to have priorities about cutting local programs they don't like so funding does not have to be raised for the programs they like--not always clear what they like, though.
So we have different priorities. I probably favor more public spending and investments than the posters on this thread. There used to be ways to just disagree with civility instead of this name calling and taunting. But I guess when most residents don't agree with your priorities, frustration can lead to disrespect and taunting.
I believe in paying for what I want. Pat seems to disagree with the plan that I and the other 16 infrastructure commission members laid out to pay for capital improvements but at least she is clear that we intended to pay for improving our infrastructure. And if I understand her correctly she would like to pay for the infrastructure but through cutting other programs.
That is a disagreement and doesn't wearrant the name calling and disrespect. Disagreeing posters might have more credibility if they showed their full names but that is their choice. I guess they are embarrassed.
Then we have the poster with the embarrassingly silly name of "common sense" who can't remember posting on threads I started and other threads where I described my approach to the retirement benefit challenge--lower benefits for new employees, higher contributions from existing employees and additional city funded contributions because all of the unsustainability going forward is not the fault of the employees.
Posters might not like the shared approach to restoring sustainability but that again is a disagreement that could be discussed in a civil tone.
Posted by Me Too, a resident of the Adobe-Meadows neighborhood, on Aug 8, 2012 at 11:49 am
Stephen, so education, infrastructure, and services/amenities are your priorities. I guess that's helpful, though since it covers just about everything we spend tax dollars on, it may not be specific enough to make hard choices (aside from the choice to raise taxes).
Personally, I think the city would do very well to cut $2 to $5M in services and staff to fund the infrastructure maintenance gap and to show good faith before coming forward with bond proposals for infrastructure.
FYI, in terms of paying for what you want, via deferred or ignored maintenance, failure to build when needed, and overpaid/underfunded pension benefits, the city pulls off the neat trick of having future citizens pay for what they want. That's a big part of the problem - people don't want to pay higher taxes, but they want their services/amenities now. Hence the need for sharper prioritization.
Posted by pat, a resident of the Midtown neighborhood, on Aug 8, 2012 at 11:49 am
Stephen: Could you please SPECIFICALLY identify which posts you consider
- “vacuous, venomous drivel"
- “name calling”
This is a serious question. Branding posts with these negatives gives you an easy out to dismiss anyone who might not agree with you. If you have a thin skin, you shouldn't be blogging.
> “I believe in paying for what I want”
I don’t believe in paying for what YOU want Stephen, when it includes the CT and other non-essentials that YOU think are important but serve a very small percentage of the city’s residents.
> “ Pat seems to disagree with the plan that I and the other 16 infrastructure commission members laid out to pay for capital improvements but at least she is clear that we intended to pay for improving our infrastructure. And if I understand her correctly she would like to pay for the infrastructure but through cutting other programs.”
I agree that the city’s infrastructure is a disaster, which is no surprise given the lack of maintenance over the years.
But before you rush off to put bond issues on the ballot, cut the nonessentials. Don’t ask me for more money while you’re planning a $10M bike bridge (that started out at $4M and will probably end up at $20M), a $1M pathway between the art center and main library, unknown new features at Rinconada Park, wider sidewalks on CA Ave., a “Magic Bridge” at Mitchell Park, a CT and Zoo that should be run by private organizations, …
When I read reports about these “visioning” projects and the tens of thousands of dollars already spent on consultants for them, I think of a homeowner with a dilapidated house who is strapped for cash, can’t afford repairs and can’t pay the mortgage, yet has hired an architect and a landscaper to design a prestigious estate. Completely irresponsible!
I strongly believe in education, but I think kids can get a fine education without 600-seat theatres with flying apparatus and green rooms.
Broad brush list of my priorities:
1. Essential for the welfare of all residents
- public safety
- infrastructure, e.g., roads, city offices, police building
2. Not essential, but makes the city a good place to live and benefits the majority of residents
- parks/open space
- library (ONE, not many)
3. Not at all essential and serve only small groups of residents. (These "cherished" services should be funded by those who cherish them. Ask yourself why the city pays for a children's theatre but not for children's sports.)
Posted by Resident, a resident of Another Palo Alto neighborhood, on Aug 8, 2012 at 1:01 pm
I recognize your frustration and welcome your plea for civilized discussion.
Here's what I think.
I moved to Palo Alto for many reasons with one small child and convenience to job. We soon enjoyed many of the amenities such as being able to walk to the nearest elementary school, park, grocery store, church, etc. and enjoyed being part of the community feel that existed at the time. Since then we have grown as a family and have benefited from other amenities we were previously unaware existed such as children's classes, sports, etc. but don't think that these are unique to Palo Alto at all.
Since moving here it has become much more costly than we expected in terms of increases in taxation but at the same time we expected the benefits of improvements in infrastructure (roads, sewers, etc.). We did not expect these basic services to be neglected while money was thrown at various non basic frills.
During our time here, we have seen Mountain View in particular improve infrastructure while Palo Alto has done nothing but change a few road configurations including the ridiculous Alma/ECR turn right only as the sum total of road improvements.
I would like to see City being a better husband of my taxation dollars. I would like to see improvements in infrastructure, traffic flow and affordable, routine shopping as becoming a basic priority before continuing to fund several libraries, bike routes and theatre.
I would like to see emergency services merged with neighbors to cut admin expenses while having more funds to keep officers on the beat and fire stations manned. I would like to see schools opened rather than getting so big that the small town appeal which brought us here is lost.
I would like to see all these things done without bond measures for residents to pay increasing taxes just to keep the things that taxes should cover in a state of adequate repair.
If anyone is in agreement with me I am fine with that. If anyone disagrees with me, then I would be interested to hear why they think we should be happy (yes happy, and willing) to pay even more money than we already do.
Posted by For-The-Record, a resident of Another Palo Alto neighborhood, on Aug 8, 2012 at 2:56 pm
> May I add that with the windfall of the city owned utility
> and exceptionally high property values, we have more to work
> with but seem to accomplish less with it.
For the record:
the Utility does pass through some money to the General Fund, but it generally is not tracked in a way that the residents can know exactly how much money goes from their utility bills to the bloated salaries and benefits of the City's employees. The financial reporting is not P&L-oriented, so we don't see all of the ways the City moves money from the Utility to the City's general fund.
As to the high property values, the City only gets about 9% of the property tax generated here. About 46% goes to the school district. The rest goes to the County and the State.
The problem is never "how much money" is on the table, but "how is the money spent". The City has for a very long time been focused on spending money on "services" (meaning employee salaries and benefits) for special interest groups. There is no effective tracking of these "services", or recipients for these “services”. It is clear from asking various questions that many of these “services” are utilized more by non-residents, than residents. Examples: Art Center, Cubberley, City parks, soccer fields, Golf Course and the Airport (although this is currently a Country “services” being subsidized by city land), just to name a few.
Because of Prop.13, somewhere between 15% and 25% of the residential properties are assessed at less than $150,000. This brings in less than $1,500/property per year. New taxes are generally “ad velorem”, meaning that those properties paying a low base tax will not pay much for their “fair share” of the bonds that will be sold to fund any “improvements”. Renters (now at least 50% of the total residency) are given the vote for most tax increases—yet are not expected to pay anything directly for the increased taxes imposed on the property owners by their votes. No doubt their rents will go up, but generally these people do not see a direct linkage between their votes to increase taxes, and the increased costs that are the results of these votes—making the decision process about voting for new taxes less than rational for these folks.
Posted by common sense, a resident of the Midtown neighborhood, on Aug 8, 2012 at 8:47 pm
For the Record,
There are a number of monetary transfers from the utility to the city's general fund (more than $38+ million/year); for fiscal year 2012 here's what they are in the budget:
* Users Utility Tax ($10.7 million)
* "Return on Investment" transfer ($17.7 million)
* "Rental Income" ($10.2 million)
* reclassification of general fund functions to the utilities (examples of this are the street lights, stop lights and street sweeping, storm drains). (Value unknown for FY 2013).
The Users Utility Tax was passes back in the 1980's, and was sold as a way to pay for Cubberley (the taxes collected exceed what the city pays the school district). The Infrastructure Commission recommended taking this money and using it to pay for infrastructure.
The "Return on Investment" is what the city says they should get from "owning" the utilities. It's a way for the city council to tax the residents without having to go to the ballot box.
Rental Income is what the city charges the Utilities department for rent of buildings, etc. There are parcels of property that the city leases from Stanford for a nominal fee (such as $1/year) and turns around and charges the utility department "market rates" for the same property. Again, a way for the city to tax without going to the ballot box.
Lastly the city council will declare some function that used to be done by the city, is really a part of the utility department. In the 1990's the council decided that the electricty used to run street lights & stop lights should be a "utility" function. In the decade of the 2000's it was the repair of the storm drains; this year it's street sweeping. Many other cities, like Mt View consider these the responsiblity of the city (i.e. they don't say it's PG&E's responsibilty).
Roughly 25% of the general fund comes from the utility department. Many years ago, there was a big difference in the cost of utilities between living in Palo Alto & neighboring cities. That's no longer the case. I use less utilities than I did 5 years ago, but my utility bills have doubled.
Posted by For-The-Record, a resident of Another Palo Alto neighborhood, on Aug 9, 2012 at 2:46 pm
> There are a number of monetary transfers from the
> utility to the city's general fund
Thanks for information. However, again for the record, this level of detail has not been in the City's published budget until recently. The fact that it is there is not only a credit to the City, but also to the residents who have, for a long time, demanded better accountability for the Utility's revenues, and expenditures. (Check the letters to the City Council if you might not believe that.)
What is not generally available, is a fairly detailed review of the Utility's revenues/expenditures/liabilities. It might be possible to extract some of this information from the various packets that are provided to the UAC (Utility Advisory Commission), but the general claim that the finances of the Utility are not general available to the public stands. Again, it's possible (perhaps) to obtain these records via a public records request, but given how dismissive the City is towards honoring public records requests--it's a coin's toss as to whether, or not, the records are made available.
> Again, a way for the city to tax without going to the ballot box.
> The "Return on Investment"
Until recently, this number has been hard to find, since the actual value of the Utility's owned infrastructure has never been publicly cataloged, and published. The so-called "Infrastructure Commission" ignored all of the issues associated with the Utility's "infrastructure". At the moment, it probably would be a fair claim that the total outstanding liabilities of the City (infrastructure wise), are not readily known, or are only known to a few "insiders".
Your taking the time to post this information is appreciated--but it does not come remotely close to providing the P&L financing information that is suggested that the residents need to fully understand/appreciate the management of the Utility.
> That's no longer the case. I use less utilities than I
> did 5 years ago, but my utility bills have doubled.
Everyone is in the same boat. What is probably true at the same time, however, is everyone working for the City is making more money than they did five years ago--while you find yourself living a reduced "quality of life" and paying more for it.
Posted by maguro_01, a resident of Mountain View, on Aug 20, 2012 at 2:13 pm
" Renters (now at least 50% of the total residency) are given the vote for most tax increases—yet are not expected to pay anything directly for the increased taxes imposed on the property owners by their votes. No doubt their rents will go up, but generally these people do not see a direct linkage between their votes to increase taxes, and the increased costs that are the results of these votes—making the decision process about voting for new taxes less than rational for these folks."
I'm a renter in Mountain View and my rent is increasing 10% every 6 months though it's an old building. I believe some rents are going up faster. Downstairs there are either 3 or 4 men, visa workers I think, who sleep on mattresses on the floor with almost no furniture. Visa workers are low balled usually, but between them they make well over $200K a year and I cannot compete with that. In their case there is a disconnect with local taxes. But not for most renters.
What is being overlooked in most of this discussion is that the real agenda of local government on the Peninsula is to increase real estate values. That's it. That's why people are elected and unelected. Given that, it's easy to slip into excessive spending of the future's money on amenities instead of potholes - or earthquake preparedness (Washington or Sacramento can't back us up the way they could even a decade ago).
It would be wise for most renters in the area to move to the East Bay and commute if necessary while doing serious hellraising for transit. For Mountain View (and Santa Clara County), turning over renters low income first, should already have allowed fewer public service workers and budgets though that is unlikely to actually happen. Homeowners mostly need to await some recovery of local real estate to leave. Silicon Valley does not want workers over 40 or so and it is calender age. People today are hired for excellence within social criteria undoing some of the progress of recent decades. Most home owners in both cities probably couldn't afford the houses they live in now and few people can retire here or wish to.
There is no downside to Mountain View or Palo Alto to going up market even when it's a bubble. Of course at some point population/demographic turnover will turnover city governments too. At that point unaffordable pension and other arrangements from the past will be addressed. Bubbles work out until they don't.