Happy New Year?

By MICHAEL HALEY

Happy New Year, now pass me the Xanax, two please. That’s how this year is starting out, but will it stay that way? Here’s how it looks to me.

Lets start with the one bright spot, Obama. It appears that his campaign theme of change is even truer than he may have expected. People are really looking for change in the most real way in memory. Obama is definitely a change, and he gives people hope. We are also in a time of great uncertainty and fear. Virtually everyone realizes we need to change in major ways, and now.

I believe that the realities we find ourselves in are the result of the underlying attitudes we hold as a culture. My way of analyzing politics is to look at the underlying psychology, and this year the financial reckoning is in fact a reckoning about greed and the lack of direction.

What I mean by lack of direction is in part lack of regulation, but in a broader sense of responsibility, of voters and government taking the responsibility to direct business and to direct the government where we want it to go. There has been a huge amount of apathy on the part of Americans and they have let the government get away with not being responsible in so many ways. Combine that with greed at all levels, not just Wall Street, and you have the crisis we are dealing with.

One non-Wall Street example of that is allowing the employee unions in California to set the rate for pensions that from the beginning were unsustainable. The public refused to look at it and the state legislature continues to deny it or even to approach a solution, and now it is really going to hurt not only the state but local governments even more so.

The real solution is not so much about the correct stimulus package or bail out as it is about people waking up and demanding change. After a period of tumult and blame and fear, I believe we will wake up and handle it. We are finally at the point where we really have to.

In Napa it appears that we are going to continue with the usual land use battles, and both the PUC plan for Angwin and Napa Pipe are going to come to a head and decisions are going to be made.

It appears to me County Supervisors are going to cave to the local neighborhood group, Save Rural Angwin, and allow them to write a new type of zoning into law in order to shut down the small development PUC wants to build. If that happens, PUC is probably gone. UC Davis has expressed interest in buying the land, in which case it will come under state control. All bets are off as to how much development that will mean. We will also then be sued by the affordable housing advocates that won a law suit against the County a couple of years ago. That’s another wild card.

The County will probably counter the affordable housing problem by using Napa Pipe for that on their new housing plan. If the attorneys and judge buy it, and the population goes along with it, it might work. My sense is that it was about 50/50 with the community on Napa Pipe as a place to put housing, but Keith Rogal’s recent statements that he is willing to put less than the original 3200 units may have turned the tide in his favor.

There is still plenty of disgruntlement about it, especially from the Napa City Council and city management, but at this point with no deal with the City it looks like the County Supervisors are going to go ahead and approve something there with housing included.

We are going to have major budget problems with both the city and county, more than people are now expecting. The county will fare better because they have big reserves, but those are going to get spent fast as the state is not going to come through with their usual monies for health and human services, along with a lot of other things like safety funds. Pension payments to Cal PERS are going to dramatically increase as tax collections are seriously dropping. This means the public will expect the local governments to pick up the slack and it is going to be very, very difficult, especially for the city of Napa.

If the economy doesn’t improve this year markedly, which it is not likely to do, then the county will deteriorate into the same position as the city in 2010. The public will have to face two things, that local government balance sheets are driven fatter by development for taxes/fees, and leaner by employee costs.

Right now most Napans are in denial about both, because we could. I predict that we are no longer going to be able to do that, and will have to start to face both those issues in a different manner. Namely, not only do we need the growth that comes from development, we need to contain employee costs.

If we don’t, we are going to see much bigger unemployment and much bigger unmet social needs in Napa this year. We may well anyway.

In the long run, I believe all of this will be for the better, far better. We need to restructure all our systems, both government and economic, and this crisis is forcing that upon us. It is going to be a long haul, but it will be worth it when we get there.

 

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