Sen. Boxer issues a report on economic woes in Solano

Sen. Boxer issues a report on economic woes in Solano
By Rachel Raskin-Zrihen/Times-Herald, Vallejo
Posted: 12/26/2008 01:04:49 AM PST

Sen. Barbara Boxer has released a report detailing the impact of the nation's recession on Solano County, Vallejo and the rest California's counties and cities.

The picture is grave, and some of the most frightening remarks were reserved for Solano County -- specifically Vallejo and Fairfield, which she says are in particularly dire straits.

The report, based on interviews Boxer staff members had with officials in 20 cities and all 58 counties, paints a stark picture of the economic strains felt statewide, according to a press release.

Boxer's report recognized Vallejo as especially hard-hit.

With the city filing bankruptcy in May, an unemployment rate of 6.4 percent and one of every 10 households in foreclosure, "the city faced crippling debts of over $16 million and was unable to renegotiate contracts with police and fire unions," according to the report. The report was compiled by Boxer staff member Megan Miller based on an interview earlier this month with City Manager Joe Tanner.

The report notes that declining property values have also contributed to Vallejo's financial problems, though the city has only had to lay off three people since many public safety employees retired or quit after the City Council voted to declare bankruptcy.

According to the report:

Although the city hoped to borrow funds to cover the financial gap before property taxes come in, the bankruptcy "makes it impossible to secure any credit at all."

"Foreclosures have been a huge problem for Vallejo, which recently received $2.7 million in foreclosure assistance funds from the Department of Housing and Urban Development because the rate of foreclosures is so high."

Also, the County Assessor slashed property values, which has resulted in a tremendous loss of tax revenue for the city.

Budget deficits and revenue reductions have forced counties and cities statewide to make cuts in many important programs, and as a result, nongovernmental charitable organizations are suffering.

The report also notes:

* That financing problems have stalled critical infrastructure projects, limiting job growth at a time when unemployment rates are at their highest level in decades.

* The nation's economy, the state's budget crisis and the failing housing market have left Solano County in "a difficult fiscal situation."

* The county has a 7.7 percent unemployment rate and that one of every 10 households is in foreclosure.

* The county's first quarter outlook indicates a $9 million to $12 million revenue shortfall, most of which is due to drastic property value declines.

* Solano has aligned its program cuts, mostly in health and social services, with cuts in state funding. County officials also have delayed or scaled-back major projects and equipment purchases, and there is a soft-hiring freeze in place, but no lay-offs yet.

* The county's foreclosure rate, while still much higher than the national average, has recently slowed to 8.54 percent. And though the crime rate has increased slightly as a result of the economic downturn, there is no indication this is specifically a result of foreclosed or empty properties.