Author: jeffpelline

As the recession continues to worsen, the next shoe to drop will be state bankruptcies.

We all know about California’s budget woes, but that’s just the tip of the iceberg.

“At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well,” according to the Center on Budget and Policy Priorities. “Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.”

At least 41 states have looked ahead and anticipate deficits for fiscal year 2010 and beyond, according to the group.

Job cuts and furloughs will just exacerbate the problems, putting more people on the street and straining the system. Unemployment in the state and county is expected to creep to 10 percent.

Structural changes in government are needed to get out of the woods — a difficult challenge. Even furloughs, the least painful step, are being fought tooth and nail in California.

It shows how clueless some government workers are about the problems we face.

Our area is so close to the debacle in Sacramento that we can’t help but be impacted: tourists who shop here, and the county being sucked into the vortex of the state’s budget woes (my 1/31 blog post).

Meanwhile, as we sit on our hands, the Dow continues to slide below 8,000. Our retiree’s “nest eggs” continue to diminish, putting a crimp in local spending.

Wish we’d done a better job of diversifying our economy, and more people around here would “get it” that pinning your economy on tourism and retirees makes you vulnerable.

To follow the government financial troubles, go to Center on Budget and Policy Priorities. It’s a good resource.

Hard to see we’re in a recession, judging by the long lines at the supermarket today for Super Bowl Sunday. Neither team is one that most of us root for regularly. (At least one of them is west of the Mississippi).

We’ve been swimming a lot and eating a little, but the Super Bowl calls for something special. The beautiful weather makes the choice a “no brainer”: Fire up the grill.

I cooked a turkey on the spit on the barbeque and slow cooked some ribs on the “Big Green Egg.” As an appetizer, I prepared some shrimp in cilantro and lime marinade. I’ll grill those, too.

We’ll cook some veggies on the grill too.

To wash it down: A bottle of Lucchesi “Tempranillo” from our quarterly wine club selection and, yes, water.

Enjoy the game.

“Whiskey” almost reached the door with the hefty New York Times Sunday edition this morning before dropping it on the porch: not bad for a 3-month-old puppy, since the paper is bigger than she is.

I also read newspapers for the ads: Besides the Super Bowl trophy from Tiffany, the full-page color ad for the iPhone at the back of the Times’ “A” section always catches my eye.

If the Times didn’t want to run an ad from a competitor, it probably wouldn’t want to run this one. But at this point, the paper  no doubt would rather collect the more than $100,000 color ad rate.

The iPhone ad showed the “apps” you can get for your iPhone: snow report from 2,000 ski areas; a Yoga workout; Loopt to track (and map) your friends whereabouts in real time; and of course, the Yellow pages. The list of “apps”— much of it original Web content — grows daily.

The ad also didn’t mention you can surf the NY Times (or the Web site of any other paper, radio or TV station for that matter) on 3G.

By contrast, we’re getting the print version of the Times for a reduced rate of $24 a month, not much less than the cost for high-speed Internet access. Internet access is free in some “hot spots.”

Nowadays smart phones are the best tool to get informed, entertained or communicate (in text and video) that I can think of. And it’s “anytime, anywhere.” It’s a whole lifestyle in the palm of your hand — something the media would kill for.

We’ve long been “early adaptors” of technology — having owned an iPhone for three years.

We’re not alone. Barack Omaba is our first president to use a Blackberry in the White House. My son is playing a game on the iPhone this morning while we read the print version of the New York Times.

Newspapers and television are no longer the “one stop shop” for information and entertainment. The best they can hope for now is to provide an “app” for the iPhone or Blackberry for readers to get their content. Too few have done that.

Smartphones also are an achilles heel for community newspapers —the last hope for the business because most are still monopolies.

Most of them dismiss smartphone readers as not being part of a “core” audience. Huh? They represent prime advertising demographics, as well as the younger readers who will make or break newspapers.

As an example, how many people who visit a world-class ski resort (at least the kind upscale advertisers want to reach) get their news on their own smartphone versus the ski town’s community newspaper in print? 

Community newspapers need to move a lot faster to make their content easier to read on a smartphone. Much of their content doesn’t read well on a smartphone — if at all.

The smartphone trend will accelerate despite the recession. Now you can buy an iPhone at WalMart.

P.S. — Enjoy the Super Bowl: I’m hoping Arizona (and Kurt Warner) can pull it out. He has seven children. Wouldn’t that be a boon for Nevada County? A high-paying wage earner and a family with seven children! Ah, he probably lives in a place like Mission Viejo.

But the question we all have:  How will she handle the Sunday edition?

The state budget crisis is continuing to hammer our 58 counties. One rural county is operating from paycheck to paycheck, a dire situation, according to my sources.

Nevada County is better off than many but still facing some big challenges. Exisiting proposals call for deferring some state payments to our counties for seven months — worse than last year’s deferrals.

Our county’s biggest areas of concern are Health and Human Services (about $1 million a month of deferral) and Public Works (about $250,000 per month of deferral).

“While our reserves in these operating funds are strong and will cushion these cash flows, the cost of money impact will certainly be significant (well over $100,000),” according to county executive officer Rick Haffey in his weekly memo.

Staffing positions have been reduced from 976 when the current budget was adopted last year to 959.

Votes on the new state budget could occur as early as next Friday.

It’s been a tough week economic-wise:

•Gross domestic product shrank at a 3.8 percent annual rate in the fourth quarter, the biggest contraction in 26 years.

•The stimulus package passed by the U.S. House is running into opposition because it does not have enough infrastructure spending. The Senate is drafting an alternate package. Meanwhile, the stock market is losing confidence.

•Around here, the sale of Thomson Grass Valley — one of the biggest employers and tax revenue providers — is creating uncertainty. I’m optimistic it will be sold to a qualified buyer. I hope the new buyer will keep the existing operation intact. It will be a real test of how our community (and its touted attributes) are perceived by an outside business.

Prediction: The next two weeks will perk up with votes on a revised stimulus package and state budget. Seems our elected people can’t get it together until the “darkest hour.” How sad.

We’re still in a deepening recession, however. It’s one thing to pass a stimulus package, but it’s quite another for it to begin gaining traction. In short, the patient is still in ER, a long way off from the recovery room.

I’ll miss the joint dateline of Paris/Nevada City on Thomson Grass Valley press releases. In another release this afternoon, Paris-based Thomson announced it was putting Grass Valley Group up for sale — one of the biggest stories here in a long time. Sacrebleu!

Why? Thursday’s  anouncement could have a profound impact on the local economy:

•It puts 300 jobs at Thomson Grass Valley in jeopardy. Worse, these are the high-paying tech jobs that the county wants to attract, not lose. 

•The announcement puts Nevada City’s already suffering tax base in jeopardy. Thomson Grass Valley is one of the city’s biggest tax providers.

•It also undercuts the area’s image as a “HDTV mecca.” Grass Valley Group specializes in video servers.

The sale also will cause anxiety for the East Coast investor group that just snapped up the 60-acre parcel leased by Grass Valley Group.  It figured its tenant was “rock solid.”

The outcome depends on who buys Grass Valley Group, founded as a tiny startup in 1958. Thomson, whose balance sheet needs help, paid $172 million for privately held Grass Valley Group in 2002.

Let’s hope the buyer decides to keep the company —and its workforce — here. It has a good product line and has been tightening its belt lately. I also admire how it snapped up the http://www.grassvalley.com domain name, at least as a marketing coup.

“Intellectual capital” is often the best asset of any tech company. On the other hand, companies like to merge operations for “synergy” and cost savings.

This is an outcome to watch carefully: A lot more carefully than the guy  who was recovered from the Yuba River with a bullet wound in his body.

The latest twist to the Cascade Shores wastewater treatment debacle should be the final straw in persuading us to build a regional wastewater treatment plant.

The state’s financial crisis has frozen a loan needed to build the long damaged plan — ironic since the state pushed for the construction in the first place.

Enough is enough. We need to build a regional wastewater plant here to avoid a rerun of this scenario throughout the county.

Land for the plant is cheaper than ever, building a plant would create needed jobs, and infrastructure is fashionable again under the Obama administration.

The situation in our county will only get worse. Sewer rates in some communities around here already are among the highest in Northern California, largely to help pay to cost of sewage treatment plant upgrades.

We’ve seen some sharp increases in Lake of the Pines and Penn Valley, as well as Cascade Shores.

In addition, pending rules to tighten septic tank regulations (AB 885) will be costly for our residents — some of whom never fully imagined the liability of a septic tank in their yard when they moved here from the “flatlands.”

Though boring and not exactly “cocktail banter” within the gated confines of some neighborhoods (or just plain homes), this is the major issue facing our county.

Despite earnest efforts, we’re not getting very far with state and fed officials to get off their bureaucratic bottoms and help out.

The “no growth” contingent will no doubt come out in force to fight a regional wastewater treatment plant. But building one is more about sustaining our lifestyle — not clearing the way for a spate of growth.

We still don’t have enough jobs to support much growth around here, and retirees with diminished nest eggs are scouting out less expensive places to retire. Let’s not fool ourselves: We’ll be lucky to keep what we’ve got.

We already can’t find enough people to care for our growing elderly population — just check out the local classified ads. One ad after another for home-care givers but not much else.

I headed to Whispering Pines in Grass Valley for some fresh salmon from a favorite merchant, Nevada City Seafood, and noticed that the sandwich-board signs pointing to their business, as well as other signs, were up again.

I also noticed a sandwich board in front of Foothill Florist in downtown Grass Valley advertising “Valentine’s Day” flowers. (In a small town, you dig up news just by driving around, observing things and talking to your friends — a nod to “citizen journalism.” )

I wonder if GVPD had a change of heart after the controversy was publicized in The Union. I assigned the story 1/13 after hearing Nevada City Seafood and other merchants question the aggressive enforcement of the ordinance during a recession. (Again, just tooling around town and listening).

Except for getting wet in the weekend rain, the signs were out — rather unobtrusive, I would say. 

Grass Valley has the reputation for being pro business, but Nevada City has been stealing its thunder lately.

I was glad to see Nevada City cutting rents for its tenants, and some private landlords have followed suit. High rents are one of the biggest bugaboos for local merchants.

If I owned a building around here, I’d cut the rent and keep my tenant rather than hold a mortgage on a empty space.

The “for lease” sign in front of the Stonehouse in Nevada City is a glaring reminder of the bleak economy. (We got a postcard in the mail, saying the owner would consider a partnership or sale too).

It will take a village to dig us out of the recession, and cutting some slack to our local merchants is a step in the right direction.

The most popular feature of most community newspapers is the police blotter. Most subscribers consider it a “must read,” because they want to know what is going on in their neighborhood.

Internet entrepreneurs have figured this out, too, and they’re out to create their own police blotters and ramping up their efforts. For example, here’s an ad from Craigslist from an outfit called United Reporting for a part-time job:

“We want freelance reporters to visit local Police Departments (in the Sacramento Valley area) and pick up or jot down arrest blotter once, twice or up to three times every week. Dispatch it directly to us, and we will pay you $25.00 per visit – averaging up to $300 – $500 per month. ”

The ad is from United Reporting — Crime Beat News, an online news service providing local and statewide crime news at http://www.unitedreporting.com.

Similar services are springing up as well, some offering to sell an interactive site back to the newspapers.

Soon residents could begin bookmarking Web sites that list the blotter and arrest reports in their own community — not to mention their friend’s and relative’s — rather than get the scoop from their local paper.

The Web sites could also up the competitive ante (and win converts) by publishing the people’s names and/or exact addresses — something most newspapers choose not to do. 

This means newspapers will have to dig deeper in crime reporting to differentiate themselves. At The Union, I liked to report crime news but also probe deeper, asking some tough questions:

•Why are there so many plea bargains and so few jury trials? Is a “revolving door” of justice cost effective and successful? What about drug court graduation rates? Should they be higher with more accountability?

•Why are so many judges appointed, not elected? How can a community make sure judges are accountable for their decisions?

•What about the conflicts of interest that crop up among law enforcement, those who manage their budgets (elected officials) as well as judges in a small community? What can be done to minimize this?

•Are law enforcement officers effective at “community” policing? Are they being vigilant in enforcing loiterers?

It’s all good information but not exactly “feel good” reporting. It can stir people up (at least the subjects of the stories), who can raise a stink. You have to balance it out with “celebratory” reporting, such as the award-winning page one profile of Nevada County Chief Deputy Coroner Cathy Valceschini that Robyn Moormeister wrote when she worked here.

But the newspaper has to stand by its reporting and maintain its independent voice — a challenging task in any small town.

It’s a Catch 22, however. Newspapers are losing their grip on the police blotter (a golden egg of content) and will have to search for new ways to provide the unique, local information to maintain and grow readership.

A sad fallout from the recession is a rise in suicides and calls to suicide hotlines.

Our area also is suffering. The other day another suicide occurred here that has rattled our community, coming in the aftermath of some other prominent ones last year. (My policy is not to provide details of private suicides, just as any responsible journalist would.)

You can imagine how it could happen: People got in over their head financially and found they couldn’t pay their bills. Some lost their jobs or their homes. They worried about not being able to provide for their family. Money troubles typically are the biggest cause of stress, according to psychologists.

Our area’s suicide rates already have been at all-time highs, as The Union disclosed last year. The reporting generated some concern from the self-interested types around here who always lobby for “happy” news — but the reporting shed a light on an ongoing problem we need to discuss.

We obviously need to keep discussing it.  

Suicide is a national problem too. Earlier this month, Newsweek highlighted the issue, pointing to the suicides of some of the world’s most financially powerful people.

“The suicide rate has already gone up, and my suspicion is that it will not go down,”  Paula Clayton, director of the American Foundation for Suicide Prevention, told Newsweek. “There are data to substantiate a relationship between unemployment and suicide.”

The working class eventually pushed the suicide rate up after the Great Depression, Newsweek reported.

We have a much bigger safety net than we did in the ’30s to help counsel people and prevent suicides. Let’s hope we can help them out.

Postscript: On a more upbeat note, our new puppy “Whiskey” fetched The New York Times from the walkway this morning, a milestone.