Monday, November 17, 2008

San Jose to Ask for $14 Billion of Bailout Funds

I've seen estimates that a minimum 50% of the growth in California gross domestic product over the last seven years was fantasy based on the real estate market. Personally, I think the percentage was higher. California is screwed and it's 53 strong House of Representatives delegation aims to make the rest of the country pay for their detour from reality.
From the San Jose Mercury News:

San Jose mayor seeks slice of bailout pie

...with $1.6 billion in unfunded retiree health care obligations, plus $500 million worth of local and regional road work to be done and $750 million in federal help sought to bring BART to the South Bay, Reed noted the city has a full slate of needs....

California mayors plan to present their own bailout wish list through the governor soon, after Schwarzenegger finishes dealing with the state budget meltdown.

Reed created a minor furor Friday when he told an Associated Press reporter he would seek 2 percent of the bailout, or $14 billion, for San Jose — an eye-popping figure, given that the city's entire annual budget is $3.3 billion. Reed later told the Mercury News that his remark was "off the cuff," and based on the fact that the city contributes more than 2 percent of the nation's gross domestic product.

"It's just a number I can do in my head," he added.

But he wasn't entirely kidding, either. Especially after the city manager reported Friday that, thanks to the sinking stock market, San Jose's pension funds are down $950 million since June 30, when they were valued at about $4.3 billion. Without a market turnaround in coming months, that would increase the city's costs to cover pension benefits....MORE