
San Francisco faces fiscal chaos - Cbasedlifeform
https://wolfstreet.com/2020/05/31/san-francisco-epitome-of-everything-bubble-faces-fiscal-chaos-boom-and-bust-always/
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mc32
CA has always been about boom and busts. Governor Brown knew this and kept a
tight fist on the purse strings... to the chagrin and annoyance of the “we’re
rich, let’s spend” crowd. If it were not for his fiscal conservatism it’s be
even worse. Of course SF is the poster child for spending copious amounts of
money on pet projects while ignoring the big issues.

~~~
mylons
CA’s booms and busts now, for the state and city governments, is almost purely
centered around Prop 13. The NIMBYs won. Unless you have owned a home for
decades and have insanely low property taxes it’s extremely hard to weather
these cycles. NIMBYs gain from the booms, and relax during the busts.

And as a result of Prop 13 the state relies heavily on income taxes, when
people leave or lose their jobs there goes the state income.

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eanzenberg
Prop 13 is just homeowner fiscal responsibility. Repeal it and watch as
existing homeowners are forced out of their homes onto God knows where, for
factors out of their control, and in the hands of government officials who
decide how much something is worth.

Also, I’m not sure how many funds this would ultimately raise. Houses will
flood the market as existing homeowners can’t afford their taxes, putting
downward pressure on housing costs and ultimately decrease tax revenue.

~~~
mc32
You could apply it to new sales —grandfather current owners to minimize that
effect.

~~~
0xffff2
Isn't that what prop 13 already is? Nominally property taxes reset to market
rate at each sale. (Nominally because there are loopholes you could drive a
big rig carrying a Falcon 9 through.)

~~~
ashtonkem
One of the loopholes has been transfers to children and grandchildren. There
are residents in our town who pay 1970s property tax rates just because of who
their parents or grandparents are. It’s a perversion of the nominal American
dream.

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tarr11
Every major city seems to have its own flavor of this. See also:

New York budget crisis [0], Chicago [1], Dallas [2], etc

[0] [https://www.politico.com/amp/news/2020/05/31/new-york-
budget...](https://www.politico.com/amp/news/2020/05/31/new-york-budget-
crisis-bill-de-blasio-290108)

[1] [https://www.wbez.org/amp/stories/how-covid-19-could-hit-
chic...](https://www.wbez.org/amp/stories/how-covid-19-could-hit-chicagos-
budget/0b9b4290-d19f-479e-afe5-56691bc7cc54)

[2] [https://www.nbcdfw.com/news/local/dallas-budget-crisis-
prese...](https://www.nbcdfw.com/news/local/dallas-budget-crisis-presents-
problem-current-officials-have-never-seen/2364765/?amp)

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baskire
Don’t forget the pension issue

[https://www.sfexaminer.com/news/genuine-solutions-for-san-
fr...](https://www.sfexaminer.com/news/genuine-solutions-for-san-franciscos-
pension-crisis/)

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jlewis_st
This article appears to be mostly cribbed from SF Chronicle's coverage, which
has additional context and some discussion of pension obligations [0]

[0]
[https://www.sfchronicle.com/bayarea/heatherknight/article/SF...](https://www.sfchronicle.com/bayarea/heatherknight/article/SF-
s-top-money-man-grapples-with-dire-forecasts-15304610.php)

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thoughtstheseus
Curious how local and state governments can face “fiscal chaos” while debt
issues by the federal govt. is highly desirable. People say governments run
deficits during economic downturns (which is true) but in the US local and
state spending is more pro-cyclical.

~~~
mylons
Cities can’t print money

~~~
xtacy
Didn't the Fed say it will buy up to $500B of municipal bonds as part of the
new QE program?

~~~
mylons
Not sure, but the Fed is still in control here. They will buy as they see fit.
Where as SF would almost certainly love to issue themselves some debt to pay
these bills right now.

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dmode
Here’s the thing - I have been hearing doom and gloom about SF for 20 years.
It will do fine

~~~
hiram112
The problem has always been the pension obligations, specifically the medical
costs. The math cannot be disputed. The reason why it really is different this
time is because the Boomers will reach end of life, whether they like it or
not, and medical costs rise exponentially in the last few years.

States and localities who were in decent shape until now will be able to
weather this storm by raising taxes (even more) on the younger generations. In
California, there isn't anymore left to squeeze due to Prop 13.

~~~
dmode
I mean California had a $27bn deficit 10 years back, but ended up with a $15bn
rainy day fund. Even back then, I heard the exact doom and gloom. I will wait
and see how this plays out.

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BenjiWiebe
They missed a great headline opportunity: 'Frisco faces fiscal fiasco.

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Wolfenstein98k
San Fran is a bizarre place. I'm an Aussie, an Americanophile, and I was in
the States for months last year. San Fran was simply unpleasant - the people
were rude (young and old) and everything cost too much. The taxes were insane
too.

I couldn't bear to live there - Salt Lake City seemed to have the most similar
upsides with next to none of the downsides.

~~~
aphextron
>"I couldn't bear to live there - Salt Lake City seemed to have the most
similar upsides with next to none of the downsides."

SLC seems nice in theory, until you realize Utah is a theocracy. Not a great
place to live for anyone outside the LDS church.

~~~
jki275
I assume you're trying to use hyperbole, but there are no theocracies in the
US. LDS definitely has a great deal of influence in Utah, but there are plenty
of non Mormons who live there and have no issues living there.

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diogenescynic
I think a more accurate description would be that San Francisco chooses chaos.
I've never lived anywhere more unreasonably governed. It's like the government
is actively sabotaging quality of life and squandering its budget. One example
--the city spent $15.5m to tear down a McDonalds in the Haight and turn it
into a homeless tent camp.

~~~
dzlobin
While I don’t disagree that SF is a mess, your example is completely wrong.
That lot will become low-income housing and is temporarily being used as that.

[https://sfmohcd.org/730-stanyan](https://sfmohcd.org/730-stanyan)

~~~
diogenescynic
"Temporarily" according to who? And still $15.5m and $XXm still to be spent on
the new development, and for now it's a massive tent camp---this is why SF has
budget problems is my point. They're squandering the resources they have and
not even solving the problems, they're actually making it worse in most cases.
Tents tripled in the city in the last few months:
[https://abc7news.com/homeless-coronavirus-san-francisco-
hous...](https://abc7news.com/homeless-coronavirus-san-francisco-housing-
during-pandemic-covid-19/6196555/) SF could house these people instead of
leaving them in tents somewhere else, but we have this ridiculous idea we have
to house them in the most expensive city in the country where there's no new
supply. We're spending nearly $1m per affordable housing unit.. who is paying
for this? It's doomed to fail.

~~~
baskire
Where do you suggest housing these people. What if they refuse accommodations.

Not sure if sf can legally just ship them to say Modesto where housing is
cheaper

~~~
diogenescynic
I don't have all the solutions, but I'd probably find a working model from
another country and try to find a way to apply it here rather then this
nauseating, arrogant, and ineffective strategy of just dumping money down an
unaccountable hole and never demanding any results. SF voters are to blame
ultimately for enabling this behavior.

~~~
baskire
See country = federal government.

If California has a perfect homeless solution that it’s peer states don’t
share in. California will see immigration of homeless from other states.

~~~
diogenescynic
Not necessarily... SF could copy a policy from Amsterdam or Copenhagen. My
point is just look for a working example and model it off that. You're look
for an arbitrary semantic difference to invalidate it. SF has the budget of
some small countries and California has a budget bigger than actual countries.
The money isn't the issue--it's how it's squandered and wasted on
unaccountable half-brained solutions.

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bambam24
This article is totally lives in SF. Author should know that this story is
same in every city in the world. Not just SF. He might hate SF or whatever but
what happens in SF is happening in every city in the world. Good Morning

