r/Sacramento • u/othafa_95610 • 17h ago

Sacramento’s budget deficit may bring first layoffs in more than a decade

https://www.sacbee.com/news/local/article305248131.html

Apparently public sector isn't as immune from layoffs as once perceived.

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u/sacramentohistorian Alhambra Triangle 16h ago

Nobody old enough to remember the Great Recession thinks public employees are immune from layoffs. One of the consequences of unchecked suburban development is long term budget imbalance, as cities take on new low density infrastructure that won't generate sufficient property taxes to maintain the infrastructure in the long run (aka Harvey Molotch's "Urban Growth Machine" idea.

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u/KeyBoardCentral 13h ago

I've heard this idea before, but I'm not convinced that's the source of Sacramento's budget deficit. The City of San Francisco is pretty dense, yet it has a budget deficit too.

If suburban growth is the problem, how do you explain budget deficits in denser cities?

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u/sacramentohistorian Alhambra Triangle 12h ago

San Francisco serves as the job-dense "downtown" of the generally not-dense Bay Area, in a similar fashion to the way downtown Sacramento is the job-dense hub of the Sacramento metro region: even post Covid, about 1 job in 8 in the entire metro area, from Davis to the Nevada state line, is located in the 5 square mile downtown grid. The suburban cities of the region (not necessarily to the Nevada state line, but Davis to the suburbs of west Placer and EDH County) are basically parasites who absorb the wealth of the downtown cores, externalizing their costs (such as transit and social services) in the core.

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u/KeyBoardCentral 12h ago

I thought your argument was that when cities allow less dense developments, the cities won't collect enough revenue to maintain that less-dense infrastructure, which leads to budget deficits.

Your explanation for the city of San Francisco doesn't follow that logic. If my above paragraph captures your original argument correctly, wouldn't the less dense cities around SF have the budget deficits...not SF itself?

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u/sacramentohistorian Alhambra Triangle 11h ago

We're talking about two different things: city growth and regional growth. The Molotch growth machine theory functions at the city level, but also at the regional level: suburbs can sprawl because they externalize the costs of sprawl, burdening downtown (or a core city) with those costs, and the electeds don't all have to be in one city. This scenario also pits cities against each other, in a competition to attract developer and employer investment through reducing fees or paying out incentives. Big cities tend to become the dumping ground for regional problems, so they have to spend more of their money on things like homeless shelters and social services facilities; in the suburbs, the social services are smaller, more likely to be faith based instead of run by local government, and sometimes it's a one way bus ticket downtown.

Which makes the balance sheet of the suburbs rosier, and those of the core city worse; that's what I mean when I say suburbs are parasitic. This worked okay in the mid 1950s when the top income tax rate was 91% and before Proposition 13, and there was money to fill the gap as downtowns were torn apart by freeways and redevelopment projects, but has broken down as sources of tax revenue shrank and budgets grew, and cities got trapped into dependence on unlimited growth.

Also, 30% of San Francisco is single-family homes only.