Deflecting blame for the city’s money woes on “forces and factors outside” his control, Mayor Antonio Villaraigosa ordered a series of “belt-tightening measures” Tuesday to try to reduce a looming $110 million budget deficit this year and a $400 shortfall next year.
The mayor’s memorandum to department heads, the City Council and other top officials praises cost-cutting efforts undertaken already and tosses around phrases like “prudent, focused and multi-faceted,” “hard work and sacrifice,” and “conservative revenue forecasting and expenditure discipline.”
But those efforts are not enough, he said, because the city “has had to endure enormous financial challenges” caused by the national housing and credit crunch, failure of financial institutions and the stock market declines.
In addition, his budget underestimated the cost of gas prices and lawsuits by $55 million and overestimated revenue by the same amount.
The six-page memo called “FY 2008-2009 Belt Tightening Measures” AVBudget.pdf contains seven directives to department heads but it contains no drastic steps such as layoffs or cuts in public services.
Instead, he urges them to limit hiring and overtime to essential needs; suspending general fund purchases for furniture, equipment and computers; raiding infrastructure investment funds as has been done often in the past; cutting back on mailings; speeding up grant and bond funds recovery and seeking $2 million from signage on the Convention Center and $38 million from selling the Mangrove site.
He called these steps “but a part of the extraordinary measures we must take to address our projected year-end deficit.”
But taken as a whole his actions seem like window-dressing for a mayor seeking re-election right at the time next year’s budget must be put together rather than a tough CEO prepared to brave criticism for imposing austerity measures that would get ahead of problems of declining revenue and rising costs.
The giveaway is his plan to go ahead with a 3.9 percent cut in business taxes on Jan. 1. He called it a “stimulus” even as he is seeking tax hikes on the general public on the Nov. 4 ballot and his administration plans on imposing a 13 percent water rate hike on Jan. 1. Clearly, one of his goals is to keep the business community on his side — something that could be vital to his re-election if developer Rick Caruso who runs a multi-billion-dollar corporation jumps into the race.
The mayor’s strategy all along has been to raise so much money — now nearly $2.5 million — that he can scare off well-funded challengers and avoid a runoff election campaign in March and April when more severe actions likely will be needed.
Besides going forward with the business tax cut, Villaraigosa suggested a series of other actions that should be taken::
* Limiting fee waivers for special events
* A 10 percent reduction in water and power use in city buildings
* Voluntary furloughs by city employees
* Advertising revenue on the city’s public access computers and at its wi-fi locations
* Reviewing existing contracts for possible savings
* Reducing fuel consumption and replacing gas-guzzling vehicles with higherf-mileage ones.
“Working together, creatively and wisely as we have, I know that we can all meet the current fiscal challenges,” he concluded