City Government Now Owns 12 Blocks of State Street
By Dr. Thomas Cole
Reading through the recent Grand Jury report on Santa Barbara City pensions. It shows the city has unfunded pensions of $392,000,000. We'll call that $392M, a lot of dough. Considering the city’s current total 2022 budget is $391,968,325 which includes salaries of $116,321,484 and benefits of $62,527,103 paid every year… It seems Santa Barbara needs to go on a spending diet. Jenny Craig times $392 million.
Like the old joke about President Bush who when told We've lost five Brazilians asked, “How much is a Brazilian?”
We might ask how much is this unfunded pension debt of $392M and how are we going to pay for it? To help illustrate we did a little survey of commercial buildings on State Street, starting at Gutierrez Street, just to see how much real estate the city has given away to its highly valued pensioners.
Going block by block from Gutierrez Street to Haley the first block we have 120,000 sq feet of various buildings. Second block Haley to Cota Street is 126,000 sq feet of buildings. Third block is Cota to Ortega Street 51,000 sq feet. The fourth Block is Ortega to Canon Perdido Street includes the mall, both empty department stores Macy's, Nordstrom and the giant office buildings across the street, all this comes in at a hefty 250,000 additional sq feet (approx)
Adding up these four blocks of prime State Street real estate we get 718,000 sq feet of buildings, restaurants, department stores, retail outlets, professional offices, tattoo parlors, bars everything. The average price to buy these properties is maybe $550/sq foot. Thus; 718,000 sq ft. x $550/sq foot is…Drumroll. $394M. The same amount as the city’s unfunded pension liability $392M.
So the city would literally have sell the first four blocks of State Street from Gutierrez to Canon Perdido - To pay the unfunded part of retired city employee pensions. They will of course tax us to pay this off.
And what about pension liabilities that are funded or already paid for? To count in the funded pensions, the Grand Jury reports they represent 67% of the total pension debt. The equation is; $392M = 33% unfunded pension liability, thus funded pension liability is 67% or $795M which we can assume has already been taken from city tax revenues. That additional $795M would buy another eight blocks of State Street. So Santa Barbara City total current pension debts have taken a total of twelve blocks of State Street from taxpayers. Twelve blocks of State Street from Gutierrez Street to Valerio Street being sold to pay pension benefits. And remember the city is still paying $62,527,103 every year in current benefits.
So after all that, does the City need to spend more money? Hire more employees? Pay for more studies? Raise fees? Raise taxes? Close down more businesses? Or instead spend less money and spend it more wisely? We can hope our new business oriented mayor will help. And knowing all this, if the City wants to keep spending more of our tax money on;
New City police station proposed cost $100M
City desal plant - build cost $250M
City Sustainability & Resilience Program unfunded $36,844,038 (per year)
28 affordable housing units $30M
Global warming lines across town, Hotels for homeless, Empty bus lines, Giant town malls, Tax giveaways for Saks Fifth Ave, Police Equity Training Programs…
Ask yourself - How many more blocks of State Street shall we give away to our spendthrift city government?