Here's a contribution from Fred Pilot, including an article and his commentary on it, for your consideration. He's pondering the impact of the California budget crisis (something we see in smaller scale in other states as well) on the future of residential private government. One possible response to fiscal crisis is more privatization. Another response would be to strengthen the financial position of local governments. Here's Fred's take on the article that follows, and he highlighted in bold the text that I have also bolded for your convenience:

Fred says: "This proposal, being floated in hopes of getting both Republican and Democratic support for passage of an overdue state budget, would provide local governments greater property tax revenue from housing and thus reduce their need to privatize residential development as common interest developments governed by private homeowners associations."

Now, you may want to read the whole thing, but here's the top half of the Sacramento Bee Article:,

State extends its hiring freeze
The move, paired with a purge of vacant jobs, may save $550 million.
By Alexa H. Bluth and John Hill -- Bee Staff Writers - (Published July 2, 2003)
As California's fiscal year began without a budget Tuesday, Gov. Gray Davis issued dual orders aimed at trimming costs from the state's work force.


Davis also predicted a quick end to the legislative budget standoff as the outlines took shape of a possible deal to finance a chunk of the state's deficit without raising taxes.


"While everyone else prophesies doom and gloom ... I continue to believe that we will see action by the end of this week," Davis said after signing the pair of executive orders.


One would chop $250 million from the budget by eliminating 20,000 vacant government jobs.


The second would extend for at least two years a hiring freeze first imposed by Davis in October 2001 when the state's fiscal slide was becoming apparent. The governor said the savings would amount to about $300 million.


The hiring freeze does not apply to public health, safety and security personnel, including those hired by the California Highway Patrol, the Office of Emergency Services, the Military Department, and some Department of Health Services offices, according to Davis' order.


Davis urged the Legislature and the judicial branch to join the halt in hiring.


The move is designed to reduce California's payroll costs, but Davis administration officials also are attempting to persuade state workers' unions to agree to salary or benefit reductions, or face layoffs to achieve $855 million in payroll cuts.


In the absence of a spending plan and a deal with workers' unions, the Personnel Department has issued 9,000 notices warning state employees they may lose their jobs. But Davis said Tuesday's move might spare some from losing their posts.


Legislators failed to pass a budget by the midnight deadline Monday. State Controller Steve Westly has warned that state cash will soon dry up and he will begin halting payments to state vendors, community colleges and schools.


Lawmakers have for weeks been frozen in disagreement over raising taxes to help fill a budget deficit expected to reach $38 billion by the end of this fiscal year. Democrats have put forth several plans that contain program cuts, borrowing, and sales tax and other tax increases. Republicans have called for deeper cuts and rejected tax hikes of any kind.


Legislative leaders, however, talked informally Tuesday about a possible compromise that includes financing $10.7 billion of the state's deficit over several years using complicated maneuvers that avoid a tax increase.


"The key sticking point upstairs is how in fact we are going to sell current-year deficit bonds," Davis said. "One reason for my optimism is that I do see the sides narrowing on that issue."


The complex deal would work something like this, several sources said Tuesday: The Legislature would repeal a half-cent or a quarter-cent of the sales tax now dedicated to local government, replacing it with a sales tax increase of the same amount for the state. Consumers would pay the same tax on purchases, but part of the revenue that used to go to local coffers would instead go to the state treasury.


To compensate local governments for lost revenue, the state would give them the same amount in property tax. In effect, that would reverse the change that occurred in 1992, when the state shifted property taxes from local governments to schools to reduce its own costs during the last fiscal crisis.