You're watching...
Mayor Mick Cornett of Oklahoma City discusses the financial challenges facing cities across the U.S.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Cities on the -- twelve communities across the country have filed for bankruptcy protection since the 2008.
Financial crisis.
Did you think -- even more.
But more and more cities may do likewise.
Joining us now Oklahoma City mayor Mick Cornett is communities -- despite the cut -- Economic problems and we're saying we're concerned now about these cities going -- -- What would your advice be -- what you've gone Roanoke city what would your advice be to say the mayor Stockton right now.
What I think sometimes bankruptcy is the catalyst for change and they perhaps need to look at the state government especially in California -- proposition thirteen -- -- limits what they can do with property taxes.
On a more balanced revenue series of streams.
There's property tax or sales tax largely but.
They rely on property tax for operations and from what we went through it's almost you know pre determined that they're going to be a number of California cities -- just can't make it.
What is the bigger problem for the city government's spending.
More revenue collection Eric Schmidt -- Google said last week federal government's problem is spending.
Well in set the city leveled the expenses come -- personal driven.
So you're talking about contracts with labor unions and labor unions are part of the problem but specifically California's been the declining property taxes.
That have had have most likely lead of the to the bankruptcy and if your city is going bankrupt I would say you don't have to -- -- because chances are the service is -- and cut the worst is probably already taken place in.
And in your property taxes have I have probably already -- know been affected that accordingly and your and your housing values -- probably wouldn't affect.
What bond ratings -- a lot of our viewers dependence still would like to be investors and their own community by the media bonds.
From their communities it but the but the bond rating agencies may have a different take on the.
Well people are by -- number eight if you see a drastic change in a bond rating that's trouble because they the that -- its regulator said that they detected something.
But you know if it just -- and a slightly I would wouldn't worry too much about a but it can be a spiraling effect as the cost you more to borrow money and you can't get your way out of your troublesome easier drastic change that's that's big trouble financial advisor out of -- Miller import -- -- -- -- -- -- Munis have been among the best performer since the meltdown in part because we feared so many defaults.
That didn't happen they mentioned unions and and and labor agreements.
It seems like they're pretty in transit and unwilling to give give backs to stop cities from going.
Bankrupt are the unions start to listen more we you know I think that's why the bankruptcies are occurring in some cases because sometimes if you have a bankruptcy it'll be a catalyst for a for -- real legitimate conversation where we go from here.
And I I think sometimes bankruptcies in the first thing to bring labor unions to the table.
Pensions has been the big problem for many of these cities and across the country many states across the country.
Calpers 1% return they were forecast to grow at seven and a half percent.
That puts many more cities potentially California.
In jeopardy.
What would you advise -- be done considering the precarious state of count.
At this point when you're right because you are typically we think it only affects the current employees we saw the one city that the mayor put them down the minimum wage.
And so that -- -- no question that not -- many people in municipal government are getting a raise these days but it's also the retirees as you mentioned though.
Those those long term pension issues are are really weighing on cities.
And to a certain extent it's easy for elected officials.
Two -- to negotiate terms that are gonna affect other elected leaders down the line and that's kind of what we're saying I think there's been some.
Some some some -- decisions that were made in years past the current -- Alicia.
I can't imagine hogs -- -- -- -- -- all maverick card out of Oklahoma City didn't see again I think general.
