The chatter from many presidential candidates and local politicians is that corporations and businesses are corrupting government and buying the government they want. While there is no denying that corporations do their best to influence and direct politicians, businesses are not the only ones playing that game and are often the target of spending interests that attempt to manipulate political class, as well. As the current Los Angeles budget situation shows, those interests have had great success.
A recent Los Angeles Times editorial best captured the process of public sector unions bending politicians to their political will to meet budget demands to meet union wage and benefit requests. At the same time, politicians are not open with citizens about the city’s financial situation.
As the Times editorial points out, the city budget, hailed by city officials just six months ago as reaping surpluses of $33 to $77 million a year over the next four years, is actually facing big deficits of $200-$400 million over the next four years.
Why? Because the city officials ignored in budget calculations anticipated pay hikes and healthcare benefits that were coming to the tune of $750 million over three years.
The reason for budget problems around the state of California is no secret. Tha Times editorial nails it: “Public employee unions are major donors to City Hall political campaigns, so perhaps it should be no surprise if elected officials are reluctant to drive a hard bargain or unwilling to question the deals in public.”
The editorial noted that pension costs already consume 20-percent of the city budget. That number is expected to rise. The Times points out that services may have to be cut in the face of high labor costs.
The other alternative, of course, is to raise taxes and that is being tried up and down the state because of the pension and healthcare squeeze on government budgets. Often targeted for tax increases are those businesses painted frequently as some kind of villain that is shirking civic responsibilities by not paying “a fair share” in taxes.
Since, as the Times points out, public union donations to political campaigns is a great influence on elected officials, many politicians are ready to line-up and take a shot at businesses, too. Let’s not be naive and ignore that business, too, makes political donations to sway politicians. At one time, business was the dominate force in local politics, especially Los Angeles, and whistled the tune politicians followed. But, that is no longer the case.
Given the Los Angeles budget situation, is it any surprise that Mayor Eric Garcetti recently supported tax increases on business by endorsing new commercial building property taxes?
The Times warns that reforms to the budget process and the spending situation should come now at a time when the national economy is booming and money is flowing into the city’s coffers.
One necessary reform is that politicians should act much like impartial jurors—weigh the evidence of spending requests and demands on the taxpayers independently by ignoring the influence of the political donors of all persuasions. Follow the facts and be fiscally responsible. Wouldn’t that be refreshing?