Commentary: It’s time to stop overspending in Newport Beach
By Bob McCaffrey
1:48 PM PDT, October 2, 2014
Newport Beach Councilman Mike Henn’s recent commentary about the city’s finances is worthy of a response [“Commentary: Prepayment of debt would trigger financial penalties,” Sept. 15]. His condescending reference to education and ignorance is symptomatic of how the little taxpaying serfs of Newport are treated by our intellectually superior elected officials. But I digress.
Henn makes a point that we can all agree upon. Newport Beach has a lot of money. How many cities have oil wells? Even better than oil wells, how many cities have Fashion Island churning out sales tax?
Henn references the city’s credit rating by the same agencies that CalPERS is suing because they relied upon the credit rating of Structured Investment Vehicles (sub-prime mortgages). CalPERs lost more than $1 billion in retiree funds, saying it didn’t really understand the investments but committed the money because the deals received the “highest credit ratings” from Moody’s and Standard & Poor (the credit-rating agencies that missed the Orange County bankruptcy.)
It’s really hard to spend all the money Newport collects in taxes every year. But our politicians are special and manage to spend it with vigor while perched in their $1,100 leather Herman Miller chairs.
Newport has a spending problem created by council members who have increased the city’s budget 172% during the past decade.
Our great-grandchildren will be paying off the Taj Mahal and long-term pension debt if we don’t get change at City Hall. Some $571 million of long-term debt is a lot of money — even by Henn’s standards.
City council candidates Duffy Duffield, Kevin Muldoon and Scott Peotter have challenged Henn and the City Hall big-spenders on the debt load they have piled upon Newport’s taxpayers. They have a plan to reduce the long-term debt, starting with selling the old City Hall site instead of leasing it.
Peotter, Muldoon and Duffy believe government should not compete with the private sector or be in the hotel business. It is a fundamental philosophical difference between the fiscal reformers and the current philosophy at City Hall.
They are fiscal conservatives who want to pay down the debt quicker than Henn. Henn doesn’t believe paying off the debt faster is a good idea. But he’s much smarter than the city of Irvine, which is paying down long-term pension debt in nine years compared with Newport’s 25-year schedule. Irvine will save millions; Newport gets to pay Wall Street millions.
Henn must like paying the bank (CalPERs) more money than we should. It’s just a different way of looking at things than Duffy, Peotter and Muldoon view the world.
Henn calls the fiscal reformers “ignorant” for having a different opinion.
That’s an example of why this is a watershed election. If you’re happy with the Taj Mahal cost, bunnies, $1,100 office chairs and the largest, long-term pension debt of any city in Orange County, vote for Henn’s candidates. (He has endorsed Mayor Rush Hill, Tim Brown and Mike Toerge).
If you want debt reduction, spending reform and a little common sense at City Hall, vote for Peotter, Muldoon and Duffy. This is an election between the reformers and the big-government spenders.
BOB MCCAFFREY is volunteer chairman of Residents for Reform. He lives in Newport Beach.