Chief among these trends is the widening income and wealth gap between rich and poor that we addressed earlier this week in The U.S.A.: The Third World's First Superpower (April 16, 2008).

Cities are exacerbating this trend by attempting to offset plummeting property and business taxes by raising fees. Since I live near San Francisco, I use that city as an example. Yes, S.F. is uniquely able to milk the millions of tourists who pass through the city, but nonetheless the trends which are so egregious in S.F. are visible elsewhere, too.

San Francisco: $100 million for city - that's the ticket:

San Francisco now gets about $90 million a year from parking fines. Tacking on another $10 per violation would raise about $13 million or so more a year. Parking at an expired meter, for example, would ballon to $60 downtown and $50 in a neighborhood commercial district - among the highest in the nation.

The cost of getting a tire clamp, known as the boot, removed on cars that have accumulated five or more unpaid parking citations also would nearly triple. The removal fee, now $75, would go up to $205 in July and $215 the next year.

Officials also recommend that the cost of parking at a street meter be raised 50 cents an hour starting in July 2009. That would bring the hourly cost to between $2 and $3.50, depending on the neighborhood.

On a per-capita basis, San Franciscans paid roughly $461 in governmental fees in 2004, which is more than double that of neighboring San Jose's per capita figure of $222 and almost triple Honolulu's $156 per capita, which like San Francisco combines city and county government.

This year's attempt to raise fee rates leaves San Franciscans facing the prospect of paying higher fees for everything from body bags to playing soccer. If you need emergency medical services and are transported to a hospital, not only has the base fee risen but so has the per mileage fee you pay to be transported. If you're car is stolen and recovered, the City now wants to charge you for the cost of towing and storage of the stolen car.

While the City makes some exceptions in waiving fees for low-income individuals, the question is never raised: what about the middle-classes? With the City's population dwindling, San Francisco again led the state both in the size and rate of its population decline last year, elected officials should not be pondering how to charge the remaining residents more, but rather how to keep San Francisco's most vital asset--its people.

The truly poor have no choice--they can't afford a car and/or the commute costs. They need to stay in the city to be near informal job opportunities--babysitting, odd jobs, gardening, etc.

In just one example of how the wealthy are sequestered from the slow-death-by-fees faced by the working and middle-class, consider this photo of the city's famed Victorian houses. The remodeled one on the right has a one-car garage--a rare feature in original Victorians. Thus, there is little off-street parking in San Francisco. As a a result, most residents with autos must spend a considerable amount of time searching for a parking space on the street; and as a painful corrollary, they also get a high number of parking tickets: street sweeping, encroaching on a red zone, etc. etc.

Though this might seem like a modest nuisance to you, to the resident of S.F. it is a burdensome tax, for it is nearly impossible not to accumulate parking tickets unless you're wealthy and own a multi-million dollar home or new condo with underground parking.

As people leave and property values decline, the city then raises fees on the remaining middle class. At some breaking point, the middle-class shrinks; people leave, go bankrupt, close their businesses, etc.

You might expect the city payroll to have remained in line with population growth; but no, it grew by over 50% even as population barely budged. This article is from 2004, and city payrolls have grown since then. S.F.'s runaway payroll: Workforce, overtime soared 1996-2004 (March 2004)

San Francisco, facing a projected cash shortfall of $352 million for the coming fiscal year, can trace its budgetary woes partly to a city payroll that grew by 54 percent during the Willie Brown administration, city controller records show.

Between fiscal years 1996 and 2003, which ended last June 30, San Francisco's payroll costs ballooned from $1.3 billion to $2 billion as a result of more hiring and higher wages and overtime spending, a Chronicle analysis found.

The city added thousands of municipal employees -- bringing the total to more than 27,000 -- during the period, and the number of workers earning more than $100,000 annually almost tripled just in the last three years, the records show. Despite those additional workers, city overtime spending grew substantially.

The city's municipal workforce grew 14 percent while San Francisco's overall population grew about 5 percent during the same period.

Total overtime costs grew by 80 percent from about $55 million in calendar year 1995 to nearly $99 million in calendar year 2003.

Despite the growth in hiring and higher wages and overtime spending, resident satisfaction with city services showed no improvement.

The city's overall budget -- accounting for payroll and all other spending -- grew from $3.1 billion in 1996 to $4.8 billion now (in March 2004).

On the payroll front, San Francisco does look comparatively fat. For example, the city has 35 city employees for every 1,000 residents. New York City, the nation's most populous city, has 31 city workers per 1,000 residents. And Philadelphia, which, like San Francisco, has a combined city and county government, employs just 16 municipal workers per 1,000 residents.

San Francisco Mayor Gavin Newsom has ordered all city departments to slash salary expenses by at least 8 percent in order to close a projected $300 million deficit, a move that officials say is likely to result in hundreds of city workers being laid off.

Note that the "back to basics" budget in 2007 was over $6 billion-- a hefty increase from 2004's budget of $4.8 billion.That is an astonishing 25% increase in three years, when population actually declined and inflation was perhaps 3-5% a year.

Here is a Third World metropolis in the making:

1. As in Third World cities, the wealthy live in protected enclaves and heavily secured luxury highrises, while a few feet or blocks away hundreds of homeless people sleep on sidewalks or in shelters.

2. As overburdened taxpayers flee/lose middle-class incomes, then the city adds even more taxes and fees on the remaining survivors in a desperate attempt to placate its public-employee elite, which has staked out a larger and larger share of tax revenues.

3. Rather than structurally overhaul payroll and burgeoning overtime, the city cuts services to the poor even as it raises taxes. The poor, having no choice but to stay close to employment, become a relatively larger share of the population, further taxing city services.

4. The feedback loop of higher fees/taxes, declining businesses and service cuts continues until services and revenues both decline precipitously.

5. In a counter-intuitive fashion, rents for the poor actually rise as the pressure to stay close to informal work and whatever services remain creates demand for cheaper (and hence more crowded) housing.

For more on this phenomenon, please see The U.S.A.: The Third World's First Superpower (April 16, 2008) and Planet of Slums by Mike Davis.

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