After years of running budget deficits at the state level, Governor Jerry Brown is now touting forecasts of $10 billion in surplus cash by 2018 to go along with job growth and rising home prices on the coast. But balancing the state budget has largely come at the expense of inland municipalities, onto whom many of the costs have been shifted. As Bloomberg reports, these are precisely the localities where unemployment is already high, cities have gone bankrupt, and pension and health costs are worrisome:
“Many of the things that have helped the state of California haven’t helped the municipalities,” [muni manager Justin] Land said. “They don’t have the flexibility that the state does to shift costs.” […]Silicon Valley and San Francisco experienced job growth of more than 2 percent from October 2012 to October 2013, while the San Joaquin Valley, of which Fresno is the largest city, lost jobs, according to the report. Southern California’s coastal areas also outpaced inland counties, though the gap was narrower, UCLA said.“Inland California has long relied on growth in government, residential construction, manufacturing and logistics to drive the economy and in large parts of inland California these sectors continue to decline five years into a national economic recovery,” the report said.
Construction jobs are cyclical and may well come back in time, but government and manufacturing jobs probably will not, leaving California’s hinterland facing grim prospects. California’s ‘comeback’ is still looking like so much lipstick on a pig, as sunny news of recovery on the coast is almost always accompanied by the unpleasant admission that the inland districts are sinking deeper into decay.