Comments: 2011-2012 Kern County Budget HearingsBy Michael Turnipseed, Executive DirectorKern County Taxpayers AssociationA...
 The US tends to run significant trade deficits with the rest of the world’s     economies. This has been sustainable as ...
According to Measure of America, 2010, Kern County’s 20th Congressional District isnow the poorest area in America, the Ne...
   Integrate services to achieve the best outcomes          Contract with private industry to achieve outcomes    Encou...
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Kern tax budget hearing comments 110815

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Kern tax budget hearing comments 110815

  1. 1. Comments: 2011-2012 Kern County Budget HearingsBy Michael Turnipseed, Executive DirectorKern County Taxpayers AssociationAugust 15, 2011The Board of Supervisors and Kern County will be challenged by residents’ demands toprovide ever-expanding costly services, and how those challenges are addressed willgreatly affect the economic future of Kern County. Tonight, KernTax would like toaddress issues that will have a dramatic effect on our county’s residents. Our nation’s economy is facing dramatic change.  The US economy has been growing, but at a slow rate because many areas of the economy remain impacted by the recession and a loss of industry, both of which have led to a significant loss of jobs.  The US economy is not producing enough jobs, and not enough of the right type of jobs. This large labor dislocation is both absolute and on a percentage basis quite alarming.  Until the happenings of the last month, residential real estate was reaching a turning point.  Our nation’s economy is facing many risks: • There are few statistics to support future improvement in the economy’s growth rate. • Industrial production is at its lowest levels in decades. • Government debt levels have never been higher.  Developed countries and the United States have: ♦ High levels of debt relative to their Gross Domestic Product ♦ Large budget deficits ♦ Slow rates of economic growth ♦ High levels of cost volatility due to social leverage  Developing countries have: • Low budget deficits • Less debt • Dramatically higher growth rate percentages • Lower potential cost volatility and downside  Just recently, and for the first time in our lifetimes our nation’s financial structure has led to a lowering of our credit rating; the paradigm has shifted. The Global Reserve Currency.  Contrary to the thinking of some, the United States must be mindful of its status as the Global Reserve Currency. 1 KernTax Comments: 2011-2012 Kern County Budget Hearings 110815
  2. 2.  The US tends to run significant trade deficits with the rest of the world’s economies. This has been sustainable as many countries store most of their surplus dollars.  If the US loses its reserve status, the dollar’s value will likely fall due greatly to myriad of economic forces. In the short term, this would result in a high level of inflation, but over the long term, US exports will skyrocket and real growth in our economy should occur.Looking back to last month, do we really expect Washington to do the right thing,whatever that may be? California’s leadership has shown itself to be no better. Onlyone month into the budget and already California faces a $4 billion dollar shortfall. OurState Legislature is no better than Congress. What challenges must be addressed in Kern County’s Budget?  The County has not sufficiently addressed its Strategic Plan since early 2008. The County has winged it four years since the current economic downturn completely changed the world as we knew it in 2007-2008.  The County has not produced any solutions to its pension dilemma since last year’s budget hearings.  The County has been advised by its actuary to increase the financing requirements of its pension liabilities by about $20 million per year for the next four years, yet the current budget reserves only $12.3 million.  The County continues to use an antiquated “step-down” budgeting system. Highlighting some vital statistics makes the foregoing even more frightening.  Kern County receives 16 percent of its budgeted revenue, or $237.4 million, directly from the federal government.  Kern County receives 22 percent of its budget, or $326.4 million from the state of California. 37 percent of the State’s total revenue comes from the federal government.  Yes, that is correct. According to the San Francisco Chronicle, the total state general fund budget is $85 billion, but its total expenditures are actually $208.5 billion, and $79 billion, or 37 percent comes from the federal government.  The 2011 Federal budget is $3.8 trillion, and of that 43 percent or $1.6 trillion is funded through debt borrowing.  Is it really surprising that S&P downgraded the US when it spends $1.76 for every $1.00 received in revenue, and the Nation’s debt stands at 7 times its annual revenue?  Does your Board think it is realistic to rely on the past that Kern County will receive $564 million dollars from the state and federal governments for funding its 2013 budget? KernTax does not. According to the Recommended Budget:  The Vision of Kern County is to create and maintain a customer –centered County government designed to garner the confidence, support and trust of the people the county serves.  The Mission of Kern County is to enhance the quality of life in Kern County by protecting and serving the county’s citizens. 2 KernTax Comments: 2011-2012 Kern County Budget Hearings 110815
  3. 3. According to Measure of America, 2010, Kern County’s 20th Congressional District isnow the poorest area in America, the New Appalachia. The area has declined soquickly it was not even mentioned in earlier editions. The County is the highest level of local government. It is your Board’s duty and responsibility to provide leadership on issues critical to your constituents’ well-being.  Supervisors -- it is time for change in the way we think and provide local government services! The status-quo approach is not going to be able serve the residents of this County going into the future. What Should Kern County do?  The County needs to develop a county-wide vision of Smart Government.  Kern County should be making progress toward achieving three goals:  Growing a prosperous local economy  Promoting a quality environment  Committing to fairness and equity in the services it provides The most fundamental areas for local government spending have been dysfunctional, which should be disconcerting to this Board as they are fundamentally interrelated:  The facts are clear: Better education leads to better jobs, which leads to a healthier population, less poverty, less crime and ultimately fewer demands for government services.  These outcomes are currently obscured by our governance system.  Local governments must hold themselves accountable to program results and collaborate with other local governments to be more transparent, effective, and efficient.  Local governments must realign public programs to improve outcomes: • Improve the effectiveness and value of our education process • Increase employment by attracting sustainable industry to Kern County thereby ♦ Decreasing poverty ♦ Decrease crime ♦ Lowering the cost of providing public health Kern County can and should commit to acting on four goals and this Board must lead the discussion. All government agencies in the county should work together, prioritize their goals, and strive to:  Focus on Outcomes.  Improving the value of delivering education  Increasing employment opportunities through real job growth  Decreasing poverty  Decreasing crime  Improving health  Improve outcomes  Clearly set priorities  Develop new strategies, partnerships and programs 3 KernTax Comments: 2011-2012 Kern County Budget Hearings 110815
  4. 4.  Integrate services to achieve the best outcomes  Contract with private industry to achieve outcomes  Encourage collaboration.  The current system of Council of Governments is institutionally inadequate to foster collaboration. The Board should encourage cooperation among local governments to meet our county’s challenges. The Council’s leaders should represent all of the government entities in the county; • The County • Cities • School districts • Community colleges • Special districts.  Encourage Integration and Consolidation  Local Governments must reorganize in a way that most-effectively improves results. Local agencies need the incentives and analysis to make organizational and functional consolidations to reduce costs and improve service.Four years ago, we stated the economic downturn would be deep and take five toseven years to recover. We were wrong. In the changing world in which we exist,economic power is shifting dramatically. Think tanks are now saying that BRIC (Brazil,Russia, India and China) will have half the world’s GNP by 2018. If this is true, who will bethe biggest loser, and are we willing to adjust down our standard of living? Government at all levels must get their houses in order. How many jobs have been lost to due to laws by the state legislature, punitive rules from CARB, EPA and the SJVUAPCD? One thing you can bet on, BRIC does not have needless laws and rules that kill jobs. Your Board must become a relentless advocate for common sense and jobs for your constituents. You have lobbyists in Washington and Sacramento. Use them! The future quality of life in Kern County is in your hands. Your Board must become a catalyst for meaningful, beneficial change. 4 KernTax Comments: 2011-2012 Kern County Budget Hearings 110815

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