Antonio’s Budget, Part Two: When a Plan Is Not a Plan

Contrary to his previous statement, the mayor has proposed cutting the city’s payroll by 10 percent across the board — the “meat cleaver” approach that lets him avoid some of the hard choices between basic city services and social welfare services.

Since everybody isn’t taking the same pay Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Antoniodark.jpgcut as the mayor, that means fewer workers to provide fewer services to the public.

How that is to be done is left in the hands of departmental managers and the commissions that provide oversight on them — all of whom have been reduced to political yes-men by this regime.

“These extraordinary circumstances demand a fresh approach, shared responsibility and shared sacrifice, and the willingness to make lasting changes that close the gap today and lay the groundwork for a secure tomorrow. Therefore, my proposed FY2009-10 City Budget closes the deficit in ways that minimize layoffs and keep vital services intact,” Villaraigosa says in his budget summary.

His plan eliminates more than 1,000 vacant positions, consolidates several smaller departments, reduces the vehicle fleet has been reduced, extends replacement cycles for office equipment, discontinues or renegotiates some contracts and includes “a series of responsible public-private
partnerships and advertising opportunities which could generate
hundreds of millions in revenue over the next several years.”

All that accounts for only half the $530 million deficit which is why city workers are under pressure to cut a deal to reduce their take-home after years of lucrative increases in salaries and benefits.

Much of the 60-page budget summary is a lengthy explanation of how bad the global economy is, how the LA economy is even worse and how that means tax revenue is falling dramatically.

But the heart of the matter appears on page 14, Exhibit 2, Summary of Expenditures. That’s where we learn where the winners and losers are in the mayor’s political agenda, where we find out what’s important to him.

Commissions on women, children and human relations are basically eliminated and the money rolled into a Department of Human Services which is supposed to help the jobless and homeless, as far as I can tell.

Finance, Emergency Services and Street Lighting come off basically even or slightly up while all other departments get cut.

The big losers are Building and Safety (-23%), Planning (-22%), Ethics (-18%), Clerk (-69%), Treasurer (-34%), Environmental Affairs (-14%), Zoo, Neighborhood Empowerment, Street Services and Transportation (all -13%). Those figures are based on this year’s adopted budget, not actual spending, so the cuts are undoubtedly steeper.

The entire last half of the budget summary is a snow-job on all the great things the mayor is achieving with the $7 billion still at his disposal — much of what he highlights as his initiatives seems mostly about adding more social services, protecting his political agenda for his campaign for governor, and whitewashing the impact on basic services he’s cutting deeply.

The time bomb in the budget — apart from the fact it’s mostly hypothetical and not a spending plan –.is found on page 17 Pension Fund Shortfall.

City pension funds lost nearly 30 percent of their value last year and the city — that means the public — has to make them whole. This year, the contribution to them is $714 million, next year it rises to $754 million, to $1.4 billion the year after, to $2.3 billion by 2014-15.

Many like former Mayor Richard Riordan have warned for years that the pension costs, including lifetime health benefits, was a catastrophe in the making but there is no indication of the budget summary that the proposed spending plan deals with it all.

“The final impact of these market losses on the City’s future required contributions is not yet known,” it says.

In truth, the estimates of future contributions are a lot more solid than the mayor’s estimate of what the deficit actually will be in the coming fiscal year and where the revenue will come from.

And that’s where this whole budgetary house of cards falls down.

The mayor and City Council kept on giving away raises of up to 6 percent to city workers on top of other step increases they get and spending like fools on everything else even as the economy weakened and finally collapsed.

They juggled the books to mask the problem and failed to carry out any significant measures at any time this year as the deficit got worse.

This budget does more but fails to create a stable base and scale city spending to the revenue available now and in the next few years. So we are mortgaging our future, selling off future revenue streams and will be finding new ways to squeeze more money out of the public in the form of higher taxes, rates and fees.

There is, of course, an end to all this: A miracle will occur that will save us from the looming catastrophe or the bills will finally come due and there won’t be enough money to pay them.

4 thoughts on “Antonio’s Budget, Part Two: When a Plan Is Not a Plan”

  1. The mayor is trying to get a budget through that will not anger the unions and that will appear to balance the budget for this fiscal year. There’s a campaign coming up and he will not do anything that upsets one of his major constiutencies. If you look at the numbers, the pension problem is a bomb that will bankrupt the city within three years, less so if reductions are made now, but that will not happen.

  2. The Fiesta Broadway is only used to make a point since the city appears to be in a budget crisis?
    2009 Fiesta Broadway Motion to declare this function a Special Event. “The fees and costs associated with the facilitation of this event by City personnel have been estimated at $260,586.00, and the Event Sponsor has agreed to reimburse the City $80,000.00 of the estimated amount. Approval of this request will mean that an estimated $180,586 in fees and salary costs will be absorbed by the City.” Does the fee include police and fire?
    The Council should not waive any Special Event fees for city personnel (Bureau of Street Services, Bureau of Sanitation, and Department of Transportation) until the City Administrative Officer can prove to Council/Stakeholders that an event will generate more sales tax revenue for the city which shall surpass the fee waiver of $260,586.00. If this can’t be proven by the City Administrative Officer before the Council vote, Council should not approve any fees or costs waiver.
    The City Administrative Officer is the chief financial advisor to the Mayor and the Council and reports directly to both.

  3. Both lay-offs and early retirements are needed to balance the budget. Then get smart managers to run the departments efficiently with less money and fewer employees.

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