PPOA Executive Director
wquint@ppoa.com
As of December 2019, the U.S. economy has expanded for a record 126 straight months, the longest time period in the country’s history, according to the National Bureau of Economic Research. For the first time ever, the U.S. started and ended an entire decade without entering a recession. The previous record was set during the 120-month expansion from March 1991 to March 2001. It ended as the dot-com bubble burst. Bloomberg Economics is forecasting that the U.S. economy will grow 2% in 2020 as the record-length expansion turns 11 years old in June.
The improvements in the national economy, along with associated optimism in the national forecast relative to the past few quarterly reports, have made a positive impact on the California economy, according to the December 2019 UCLA Anderson Forecast on the financial outlook for 2020. The Forecast director, Jerry Nickelsburg, presented “California Enters the Next Decade With Full Employment and Slowing Growth.” I encourage you to go to PPOA.com or the PPOA mobile app to watch the very informative Economic Outlook video, as it has huge relevance to our local and state economies.
The California Legislative Analyst’s Office (LAO) Fiscal Outlook report for the 2020–21 state budget advises that California’s budget continues to be in a good position. The LAO estimates the Legislature will have a $7 billion surplus available to allocate in the upcoming budget process, and in addition will build an $18.3 billion balance in the state’s rainy day fund by the end of 2020–21. The report continues, “With more than a decade of economic expansion, coupled with deliberate legislative action to put the budget on better footing, the California budget is in good condition.”
In Los Angeles County, Assessor Jeff Prang certified the 2019 Assessment Roll, which represents record growth and new all-time highs in real estate and business property values across the county. The roll grew by a record $94.41 billion (6.25%) over the prior year to an all-time high of $1.064 trillion in total net value. Assessor Prang said, “The strong growth in local real estate market for the ninth consecutive year will have a positive impact on services for L.A. County’s 10 million residents. From education, healthcare and mental health services, to public safety, transportation and alleviating the homeless crisis, our schools, cities and county programs will have approximately an additional $1 billion for vital public services.”
What a difference a decade can make! The 2000–2009 decade suffered two separate recessions and accompanying bear markets. The worst, of course, was the disastrous 2008–2009 financial crisis; the S&P 500 fell 57% in 17 months. At the end of what is sometimes called “The Lost Decade,” the S&P finished lower than it began — a full 24% lower, in fact. The Dow Jones Industrial Average ended 2009 at 10,428, having lost over 1,000 points over 10 years.
As many of you will remember, the “The Lost Decade” had a significant impact on California and Los Angeles County during the first five years of this decade. PPOA members as well as all County employees went without new contracts for nearly five years (2009–2012). As noted in the Executive Director’s article in January 2013, “But PPOA (and the other County unions) has been a great partner with the County of Los Angeles during the past five years during these trying financial times.” PPOA sincerely hopes that the County never forgets the help and sacrifices that were made back when economic times were tough, and that the County of Los Angeles fully commits to sharing its present great financial advances and economic resources with its workforce as we return to the bargaining table in 2020–2021.
As we begin this new decade together, I hope each PPOA member never forgets the power this association possesses when each and every one of us commits to keeping a strong unified front, no matter how good, bad or ugly times get. I wish you and your family a prosperous and healthy 2020, and hope this new decade surpasses all of your goals, expectations and dreams.