Proposition B opponents: city salaries grow from magic beans
I just received a flier in the mail today from the opponents of San Diego’s Proposition B pension reform. According to the government unions (the flier was paid for mainly by the AFL-CIO), proposition B will “cost more than you think” because:
Too costly: Prop B also freezes city worker’s salaries, pulling money out of the local economy and costing San Diego’s small businesses.
This is that famed multiplier that politicians think bureaucrats add to taxes: the city taxes small businesses, pays city workers from those taxes, and then city workers take a fraction of that to buy things from small businesses. Thus, increasing taxes to increase city salaries helps small businesses.
Not taking that money from small businesses in the first place will help San Diego’s small businesses even more!
This is just another version of the broken windows fallacy: taking a portion of someone’s income and ignore what they would have done with it, counting only what the ultimate recipients will do with it, after it gets filtered through a bureaucracy.
In response to California 2012: 2012 is going to be a very important election for San Diego. Do we continue to reform the city’s financial state, or do we resume the path to insolvency?