The County's Fundamental Mistake

All data sources are listed in the section Data Sources and Downloads.

Our Economy Is Like An Iceberg

Jobs in Mendocino County a Decade Ago

Jobs in Mendocino County Today

10% of an iceberg is above water. The 90% below holds up the part above. You can't increase the size of the part above water if the part below is melting. The part above would push down the part below. The balance between the two will always be maintained.

County (and other public sector) jobs are like the part of an iceberg above water. Jobs in the private sector are like the part below.

Ultimately the County's workforce is paid from the tax base generated in large part by workers, businesses and consumers in the private sector.

County Decisions That Drove Creation of This Debt

As described on the previous pages Six Years of Digging a Hole (1997 – 2002), the Mendocino County Board of Supervisors (BOS) during those years made two major decisions that, in the context of our local economy's long term decline, inexorably led to our County becoming one of the, if not the most indebted per capita in California.

1. Rapid Increase in County Staff: The BOS approved a 39% increase in funded positions between 1997 and 2002, about 10 times faster than the growth of the County population.
2. Slavin Study: The BOS approved the implementation of recommendations designed to make County of Mendocino staff receive the same salaries as staffs in other Counties. However, the numbers indicate the County incresed payscales far more than Slavin recommended.

Other BOD decisions during those years that significantly deepened the hole were to significantly cut economic development and promotion funding and to significantly "sweeten" the County's retirement benefits.

JOBS – INCOMES – TAX BASE

That's what we lost. The bottom of the iceberg was melting.

The County could have gone in two directions. They should have helped reverse the melting of the iceberg below water by helping to defend and create good high paying jobs, mostly because that would have been the right thing to do for the people of this County, but also so that the County would have a larger tax base to support it's budget. But that's not what the County did.

Instead, beginning around 1997, the County Administration and Board of Supervisors set out to nearly double the size of the top of the iceberg over the next 6 years, and effectively disregarded the fact that the economic base needed to pay for it had melted away.

The County's Fatal Error

The "Fatal Error" of the Board of Supervisors and County Administration was that in making the decisions that greatly increased the County's Total Staff Expenses, they did not include or consider the ability of the county's economy to pay for it!

Some of the specific questions the County didn't ask during the Slavin Study specifically or generally during the 1997 through 2002 period:

• Can our County pay the same as other counties if private sector employees make significantly less?
• Can our County maintain a rapidly expanded number of employees if we lose jobs in the private sector?
• Can our County match other counties' payrolls if it doesn't match their programs for job creation and economic development?
• What is going to happen to related expenses such as pension costs if salaries are raised?

The answers to these questions can be seen in what happened over the following 4 years as the County plunged into the ranks of the most indebted in the State.

The County acted as though it could increase the size of the top of the iceberg while the bottom was melting. What is now unavoidable is the debt is going to melt the top of the iceberg to bring it back into balance with the part below.

Click to go to next page, What We Think Needs To Be Done.