Opinion
- Details
- Written by: Congressman Mike Thompson
For the fifth straight year, the federal deficit is expected to exceed $1 trillion. Our national debt recently surpassed $15 trillion. If our debt was divided among the U.S. labor force, every single American worker would owe more than $100,000.
This is unsustainable, a national crisis, and we can’t wait to fix it.
First, our debt is a hidden tax on future generations. Instead of investing in job creation, renewable energy, infrastructure, Social Security and Medicare, our children and grandchildren will be paying back the money with interest that we’re borrowing. The interest alone on our debt currently sits at more than $200 billion a year.
Second, as former Chairman of the Joint Chiefs of Staff Mike Mullen said, our national debt is the single biggest national security threat facing our country. Much of our debt is held by foreign countries which do not share our values and are not our allies.
Last year, a so-called deficit “super-committee” was tasked with coming up with a solution to this crisis. If it failed, $1 trillion in across-the-board spending cuts would begin on Jan. 1, 2013.
The cuts would be divided evenly among defense and nondefense spending. These cuts were designed to be so painful that they would force the committee to find a solution.
They didn’t. Ultimately, politics prevented compromise, the super-committee failed to reach an agreement, tax cuts and other programs were left to expire, and our nation was left staring over the edge of a fiscal cliff.
Now the clock is ticking and something must be done. To fix the problem, we need a long-term, balanced plan where nothing is left off the table.
To start, we have to take a hard look at all government programs and make sure taxpayers are getting the most bang for their buck.
We have to get rid of programs that aren’t needed, and if a program is needed we must make sure it’s running as efficiently as possible.
For instance, with information now available online, we were able to cut the Government Printing Office's congressional printing and binding service by millions of dollars. Many more cuts like this can be found.
Defense cuts also must be on the table. A strong national defense doesn’t have to be an expensive national defense, and there are responsible cuts to be made.
Last year, the Commission on Wartime Contracting identified more than $30 billion in waste and fraud in Iraq and Afghanistan. That’s $30 billion that should never have been spent.
We can find more areas to scale back, and we can do it without making any cuts that put a single American life at risk.
Next, our tax structure must be reformed so that everyone pays their fair share.
Over the last 10 years, we have spent billions of dollars on tax cuts that weren’t paid for. These cuts played a large part in turning a trillion-dollar surplus into a trillion-dollar deficit, and that is why I voted against them.
We can’t just cut our way out of this crisis. If our tax structure remains the same, our fiscal problems will only get worse.
Finally, any plan must also make job creation investments. More jobs will mean more revenue and these revenues will help get our nation out of the red.
Developing and enacting a long-term plan that puts our nation on a fiscally-sustainable path will not be painless. There will be cuts to programs we all care about, there will be defense cuts, and some taxes will be raised.
It will not be quick. We didn’t get in this hole overnight, and we won’t get out overnight. And it will not be easy. But leadership isn’t about doing what’s easy; it’s about doing what needs to be done to fix the problem.
I’m ready to do what it takes to fix the problem, but this can’t just be a Democratic effort or a Republican effort. It will take people on both sides of the aisle.
Some might say that Washington is too divided to accomplish anything of this magnitude. But remember, our nation weathered a civil war, rescued Europe from fascism, created the strongest economy in human history, passed the Civil Rights Act and put a man on the moon.
We’ve been divided before, but we came together to do what is best for our country. We’ve faced long odds in the past, but we bet on America, and we achieved things no one thought possible.
I know we can do it again. We can solve this problem and shore up the resources we need to grow our economy, strengthen our national security, and protect Social Security and Medicare. It’s what our district and nation deserves.
Congressman Mike Thompson represents Lake County, Calif., in the U.S. House of Representatives.
- Details
- Written by: Denise Rushing
A scorpion asks a frog to carry him across a river. The frog, who fears being stung during the trip, is convinced by the scorpion to make the journey because their fates in the river are aligned. The frog agrees carries the scorpion, but while in the river the scorpion does indeed sting the frog, dooming them both to drown. When the frog asks why, the scorpion says that this action is in his nature. (Paraphrased from Aesop’s Fables.)
You may be aware that the California Water Service Co. (Cal Water), which provides water service to the community of Lucerne, recently filed for a general rate case in which they are asking for another 77 percent increase over three years for the water system in Lucerne.
This proposed increase comes at an already difficult time, and is placed upon one of Lake County’s already struggling communities.
Since Jan. 1, 2009, at least 92 homes have been lost to foreclosure in Lucerne. This amounts to one displaced family every two weeks.
This issue can be confusing. It is important to point out that the Board of Supervisors has virtually no say in the level of rates in the town of Lucerne.
While the county does not manage the Lucerne water system, the county does pay water bills there and we do share – as all citizens do – in the burden of the economic difficulties in communities that are served by out-of-area water companies.
On Tuesday, Aug. 14, at 11a.m., I am asking the Board of Supervisors to authorize sending a letter to the Public Utility Commission in opposition to Cal Water’s rate increase in Lucerne.
I urge all citizens who are concerned about the fate of our brothers and sisters in Lucerne, to take the next step – share their views with our state legislators and the public utilities commission.
I also need to point out that the entire ratemaking structure is unjust and incentivizes this corporate misbehavior and societal injustice.
While many have portrayed Cal Water as greedy and opportunistic, it is like the above story of the scorpion and the frog. The company is doing what is in its nature – Cal Water is simply playing by the ratemaking rules, and they get paid when they play the game well.
The rules themselves are fundamentally unfair because they do not have an incentive for Cal Water to share its fate with the community it serves and do not take into account its nature with appropriate disallowances.
At minimum state regulators need to consider an affordability provision or a cap – and a provision that ties rate increases to the economic well-being of the disadvantaged communities being served. Lucerne should not pay even one penny to remodel corporate offices in San Jose.
It is also important to note that the purpose of the item taken up by our board meeting on Aug. 14 is to enlist the board’s help in speaking out for Lucerne.
My hope is that the citizenry will read the facts I share here and share their own. I also hope to gather stories – how residents are impacted by Cal Waters current rates, what is happening to the community because of it, and I am asking the supervisors to speak for Lucerne to this unjust system.
Our board is often faced with increasing water and sewer rates for the systems in which we manage. In these economic times, we have asked Special Districts and the county in general to avoid any unnecessary expenses – and we look for ways to avoid or at least spread any required costs out to keep the rates affordable. I believe that the public utility commission and Cal Water have that same responsibility.
I would like to suggest that citizens look at the facts and share their own facts and stories as full time residents of this community.
Here are the points I believe that need to be made by citizens to the PUC:
First, we need to note that these “average monthly bills” as stated by Cal Water do not tell the whole story for the average full time resident of Lucerne.
According to the information provided by Cal Water, the proposed rate increase is substantial, effectively doubling Lucerne residents’ water costs within three years, bringing the “average bill” from $62.85 per month to $124.22 per month. Since Lucerne residents are billed every other month, if Cal Water’s calculations hold, the average bimonthly bill would be $228.44.
While the average bill as portrayed by Cal Water is already well above those compared to other communities, it must be noted that are even greater for the actual full-time resident of Lucerne.
In this case, “average” as stated by Cal Water is misleading. Lucerne is a community that has a large number of homes which are used as vacation or second homes and therefore has a vacancy rate of over 25 percent.
While the “typical” current monthly average is listed as $62.85, we have found that the actual bill for a full-time resident is usually much higher. Cal Water’s figures reflect a much lower average bill than is typical for a full-time Lucerne resident.
Second, the community is in a downward economic cycle perpetuated by the fixed costs of the water system.
The American Community Survey, conducted by the US Census Bureau, shows that more than 41 percent of Lucerne households earn less than $25,000 per year. This is in stark contrast to just under 20 percent of households for all of California.
Nearly 25 percent of Lucerne residents have had an income below the poverty level in the past 12 months.
Another indicator is that nearly 62 percent (22 percent in all of California) of households that rent have an income of less than $20,000 per year.
Over 42 percent – only 20 percent in all of California – of those households spend over 30 percent of that income on housing costs.
How can these families afford to spend, on average, an additional $735 per year on water?
Again, this increase is based on the numbers provided by Cal Water and we expect that the actual rate increase and burden on Lucerne residents will be much higher than stated. This community is already struggling to survive under its current water rates.
Third, the onerous water bill is a significant factor in the pushing families to the economic brink in the community of Lucerne – perpetuating the downward economic cycle in this community.
The entire ratemaking process does not take into account this destructive cycle – costs are simply allocated to those who remain on the system and the “averages” do not tell the story.
Taken to its extreme – if only two residents remained in the community – would they be responsible for the entire costs of the system?
Fourth, state regulators and Cal Water share the responsibility for turning this downward economic cycle around.
The underlying ratemaking structure is at issue here. At minimum, an “affordability cap” for the fixed costs of any company’s system as reflected water rates would make sense when addressing rates for these disadvantaged communities.
As the Board of Supervisors, and board of directors for many water systems, we take this responsibility seriously when allocating rates for the communities in which we serve water – we would expect Cal Water to do the same.
Finally, we need to question the motivation behind the rate increase.
The Cal Water application states that the increase is necessary due to a decrease in water usage since the last increase, and therefore a subsequent increase is needed to cover the fixed costs of operating the water system.
However, among the top reasons for the increase are $108,000 for salary increases, an additional $38,000 for employee benefits and repayment of cost incurred for a remodel project in 2011 at Cal Water’s office in San Jose.
Cal Water’s application shows that 34 districts are expected to share in the cost of renovations that have already been made to the San Jose facility. The Lucerne ratepayers are expected to pay the second highest share per volume of water of those 34 districts.
A small system, such as Lucerne, requires a large portion of expenditures to be shared by a small number of users. This formula is not fair to a small group of ratepayers, particularly ones with extremely low incomes.
A larger district with more users to spread the costs can afford new trucks, higher salaries and better benefits, but to expect that same level of support from a small, disadvantaged community is problematic and unfair.
In these difficult times, and with no apparent relief to the economic crisis in sight, the last thing that should be placed on the backs of local residents is the doubling of their cost to access our most essential resource, water.
I call on the citizens of Lake County to support Lucerne’s fight with this unjust ratemaking system.
Ask the PUC to deny the application for a rate increase as proposed by the California Water Service Co. for the Lucerne rate area and request the rate structures for small utility systems be analyzed and revised to reflect the undue and unrealistic burden on ratepayers.
Denise Rushing represents Lucerne, Calif., and the Northshore of Lake County on the Lake County Board of Supervisors.
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