Much of the problem in California is related to the pension system using unrealistic investment return estimates, and a period where cities, in a fit of post-911 enthusiasm, raised public safety pensions from 2 1/2 percent of final salary per year worked to 3 percent. The latter error was exacerbated by some badly botched actuarial work. My town, for example, was told there’d be ‘almost no’ increase in cost, which is only true if you define “almost no” to mean “several million”.
Most California counties soak up the lions share of property taxes, leaving cities to survive on fees and sales tax. Any hit the economy takes, immediately impacts city budgets.
“Most California counties soak up the lions share of property taxes, leaving cities to survive on fees and sales tax. Any hit the economy takes, immediately impacts city budgets.”
Actually that’s not quite true. Schools take up the lion’s share of property taxes, but you are correct that the cities and towns rely mostly on sales tax subventions. Where we live, we are essentially a bedroom community, but we did manage to get Costco to put their local warehouse store just inside our town limit. That place provides 35% of our town’s budget by itself. The other thing that municipalities seem to have a penchant for is expanding their boundaries, and when they do, you know that the developers will stick the current residents with big chunks of the infrastructure costs that they incur.