Last week, we started hearing whispers from Washington, D.C., about a possible new strategy allowing states to file for bankruptcy. California, with its $25 billion deficit, is always listed as a prime candidate.
Currently, states are not eligible for bankruptcy law protection because they cannot be sued by debtors due to the sovereign immunity states are provided through the 11th Amendment to the U.S. Constitution.
Instead, what the federal government can do is put a state into “receivership” and send a nerd with a badge and a calculator to tell the state what to do.
Federal law does allow local governments to declare bankruptcy, though they need permission from their respective states to do so.
In this regard, states are given a lot of latitude. Some states do not allow local governments to declare bankruptcy, some impose rigorous restrictions and some — such as California — pretty much grant permission automatically.
However, since Vallejo declared bankruptcy and renegotiated three of its four major labor contracts (the fourth union is suing), public employee unions have been pushing to make it harder for California municipalities to avail themselves of bankruptcy laws and the contract adjustments those laws provide.
Last year, a law to require the approval of a state committee before a local government could fly the “We’re Broke” flag almost made it to the governor’s desk for signature.
This year, cities everywhere are inching closer to a financial cliff — and we have a governor who might sign such a bill, so you can bet that some iteration of the law will be up for a vote in Sacramento.
But what about San Francisco? It seems every day we read about our dire dollar plight, whether it be pensions, Muni or law enforcement.
Could we find ourselves asking for help, sheepishly admitting our cranks wrote checks that our banks cannot cash?
To find out how San Francisco’s finances are doing overall, I spoke to Leo Levin, the director of the Controller’s Office of Budget and Analysis, who assured me, “We’re not facing any urgent cash-flow shortage right now.”
So, we can pay this month’s and next month’s rent and even spring for a matinee showing of “Lawrence of Arabia” at the Castro. But what about long term? We shall know more soon.
In 2009, voters passed an initiative that requires the Mayor’s Office to produce a five-year financial plan. In July of this year, the glory of the first full report will be unleashed for all to admire.
What is special about this financial plan is that it will not only identify (depressing) budget projections, but it will propose solutions to (inevitable) shortfalls.
The document will probably contain some painful options for paying our debts.
But, according to Levin, we will still have options. The state of California might not be so lucky.
Political history intrudes on preservation commission
A fancy political insider (and dear friend) called me last week. “There’s drama at the Historic Preservation Commission,” he said.
And that’s just not something you hear every day.
“It’s about the mayor’s appointment of Richard Johns to the commission,” he said. “Just go watch the Rules Committee hearings on it.”
So, here’s the scoop. The Historical Preservation Commission is made up of seven people. And, like Snow White’s dwarfs, each has a role to play. For example, there’s the architect commissioner, contractor commissioner and preservationist commissioner.
In this case, the role being cast was for historian commissioner. The City Charter is very specific about this. Whoever is the historian has to meet “the Secretary of the Interior’s Professional Qualifications Standards for history with specialized training and/or demonstrable experience in North American or Bay Area history.”
Johns, a lawyer and former president of the San Francisco Museum and Historical Society, likes to research San Francisco history, usually with the goal of fundraising in mind. He described his past as “not years of writing papers, but 20 years of promoting history with thousands of members and others. Promoting programs about San Francisco history, preserving history and studying history.”
As for whether his educational background is sufficiently history-related, he had this to say (I am not making this up), “I believe that my undergraduate degree in English with a history of Elizabethan theater qualifies for that.”
A number of community activists have written and appeared at public comment trying to block Johns’ appointment because they do not believe he is qualified. Today, the full board will vote on whether to confirm Johns for the four-year term.
Now I do not think one has to sport a tweed coat with elbow patches in order to be a historian, but the term does conjure images of a person with an advanced degree. Or one who has written a book. Call me old-fashioned, but I like my historians dusty from toiling in the stacks of a library. I’m fairly sure there are a few of those around here who would serve on the commission.
I e-mailed my friend: “Why is Mr. Johns being considered?”
He wrote, “He’s the husband of Willie Brown’s former Chief of Staff Eleanor Johns.” (Which is true.)
I wrote, “Sure, but that doesn’t qualify him to be the historian commissioner.”
His response, “Oh yes. It most certainly does.”