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UPDATED: LA’s Road to Ruin: Payoffs instead of Layoffs

UPDATE: Here’s what the SEIU has to say about leaders of 19 city bargaining units grabbing at the deal to avoid layoffs:While public workers across the country are being forced to take layoffs,
furloughs and pay cuts, and residents suffer drastic service cuts,
Los Angeles
has the chance to lead again by embracing a solution that creates long-term
fiscal stability, prioritizes direct service and invests in the future
workforce.” Full Text

DETROIT — Out in the prosperous suburbs northwest of Detroit, the
first days of summer are glorious with warm sunny days and gardens in
bloom even as the auto industry that feeds the region’s wealth teeters
on the brink of collapse.

In the heart of this once great city, there is nothing but the
smell of decay. Houses sell for less than $5,000, one in four people
are unemployed, whole neighborhoods are returning to a state of nature
unseen since the first settlers came here.

The long-term failure of leadership in the auto industry and the political and civic culture of  detroit.jpgDetroit have come together and brought the region into a profound crisis.

And as is usual in such cases, those who have failed offer versions of the same excuse: If we knew then what we know now…

I can’t help seeing the parallel with my town given my obsession
with trying to get the leadership of LA to learn from the mistakes we
and others have made that have led to the decline of great cities, the
destruction of the middle class and the separation of our communities
like you see here in the difference between Detroit and its wealthy
suburbs.

And yet I see City Hall’s leadership doing what they have done for
so long as they created the city’s financial crisis and continue to
repeat the mistakes of the past.

The deal on the table with the city’s unions guarantee, that short of
an economic miracle, LA will soon be just as bankrupt as Detroit is
today, that the disparity between rich and poor will grow and the
middle class shrink, that suburbs will thrive in and the inner city
decay.

My friend Karen Kanter foreshadowed the future in a new comment on
a piece I wrote entitled “What Price Labor Peace…”on City Hall’s
buyout plan to reduce the payroll.

“If this goes through, I
think we can count on our mayor to say next year or the year after
that: ‘No one could have predicted these kind of budget shortfalls.’”

For all the talk about no pay raises (for everyone except the DWP) and furloughs and layoffs, what’s on the table is an early
retirement package that lets city workers get enhanced pensions with
lifetime health benefits and voluntary leave at age 55 with as much as
a $33,000 cash payoff for many.

Eliminating 2,500 jobs through early retirement plus 1,200 others
that are vacant and deferring pay raises will allow city officials to
achieve a balanced budget on paper.

Think about it: If you’re 55
and the boss will pad your pension up to 75 percent of your highest
salary or even 90 percent for police and fire and give you a bundle of
cash, would you be delighted to retire and go fishing?

Certainly those the mayor called “deadwood” will jump at this deal
but so will many others whose knowledge and skill is irreplaceable.

The
unions price for this deal is to raise their contribution level from 6
to 6.75 percent — still a third less than Social Security deductions
in the private sector — and waiting two years to start getting raises
every six months to make them whole as if this was all just a terrible
dream.

“Once that two-year period is over, however, those same workers
would receive six pay increases between July 1, 2011, and Jan 1, 2014,
ranging from 2.25% to 4%, most of them delayed from their current
contract,” according to a draft proposal obtained by David Zahnisher in
the Times. “Those workers also would receive an extra cash payout equal
to 1.75% of their salaries in 2012 and 2013.”

This is a fantasy that will become a nightmare.

City and union officials know this. So who are they kidding? The public obviously but city workers as well.

This
inability to face reality is why the city kept giving big raises and
increases in benefits for years. And now that the bills have come due,
they still don’t have the courage to face the truth that city
government costs too much and delivers too little.

When this deal blows up it will be because the soaring cost of city
pensions and payrolls is unaffordable. We will never be able to pay for
these bills. We will face even more severe cuts soon enough and city
services will continue to decline and cause further erosion in the
city’s economic base.

It’s not a mystery. It’s what has happened to Detroit and other
cities in decay and it’s what has been happening year after year in LA.

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20 Responses to UPDATED: LA’s Road to Ruin: Payoffs instead of Layoffs

  1. Anonymous says:

    No comments? Seriously?
    This is incredible. In essence, nothing has changed from the situation in March of this year. Mr. “I’m going to dream, and I want the people to dream with me. But in order to do that, we’re going to have to take on the immediate challenges of finding jobs, of turning the economy around, of continuing the education reform, of building on the public safety record that we’ve established where we’re the second big city in America, crime down eight years in a row, and safer than any time since 1954.” has screwed the pooch.
    This is a $1 billion deficit in 9009-10 deal!
    Where is the outrage?

  2. Anonymous says:

    The drums of recall beat.

  3. Anonymous says:

    When will the ‘drums of recall’ slay?

  4. Anonymous says:

    Sorry, what is it you are trying to say? I think the rest of us are well aware that our city is on the verge of melt-down and that somehow we ought to decide what we can, if anything, do something about it. I know I do not want to leave my home, family and friends.
    I personally think it might be the solution and open the doors for a different kind of city all together. Present traditions are failing us.
    How about reorganizing into separate small cities which will still be larger than the majority of the towns all over the country?
    That way we could in each town work to solve our own problems. Any comment?

  5. Anonymous says:

    There’s a name for that…. secession.
    All for it.

  6. Anonymous says:

    From the City’s web page. “Councilmember Jose Huizar is proud to host the Boyle Heights Concert and Fireworks Show, Sunday June 28th at Hollenbeck Park, 4:00-9:00 p.m. Free admission”
    “Councilmember Jose Huizar is proud to host the El Sereno Concert and Fireworks Show, Sunday July 5th at El Sereno Park, 4:00-9:00 p.m. Free admission”
    Who is paying for this?

  7. Anonymous says:

    Lets cut to the chase shall we-isnt what this blog is all about is secession? Ron led the way once and will do it again. Hows about it Ron?

  8. Gwennie says:

    Ahhh, people, it is well and fine to talk about secssion and recall.
    The problem is that this current union contract is happening RIGHT NOW!!!
    In my view, the only way this isn’t going to happen is that public bombards the mayor and city council with our objectiosn to this kind of sweetheart deal for the unions. Bear in mind that hundreds of union people mob the council chamber and are all over the city council.
    And where is the voice of dissent in the short term? Calling for secession rather than “Stop.; we don’t like this”? We need to get the word out and public comments in.

  9. Anonymous says:

    Gwennie – “where is the voice of dissent in the short term? Calling for secession rather than “Stop.; we don’t like this”? We need to get the word out and public comments in”
    Did you just move here? This effort to change our city into a responsive entity has been going on for about 30 or more years. We have been polite. We actually beat the unions twice – on March 3 and May 19. But we still have a body of laws that turns our lives and well-being over to a gang of people who like things just the way they are. And they are taking all of us, even you, for a ride.
    This isn’t something new – it is a festering problem. The LA Times hasn’t helped at all.
    In fact they have been part of the problem.
    Gwennie, talk with some of the people you work with, the ones in your neighborhood and start thinking for yourself. Your union is not working for you. It is working for itself and its boss.
    Who the heck am I? I have been in LA since May 1955 and in the SFV since Aug 25, 1966. I am not a complainer. I have worked for my community as a volunteer starting when my children were in school. I have never collected a dime from any of you. Gwennie, girl, get smart and think for yourself. My name is Teddy Howell.

  10. Anonymous says:

    Teddy, is secession the answer? Remember it was almost a 50-50 vote in the SFV during the secession vote in 2003. The problem is that it has to be approved by the whole city.

  11. Anonymous says:

    Yes, Jimmie Hahn went to Sacramento and got his ilk to play ball and put that illegitimate law into effect. I rememeber that betrayal. He disenfranchised the people of the San Fernando Valley, that is what he did. He should be behind bars instead of sipping tequila in some Mexican resort or wherever he is “on our dime” because he is probably getting a civil service pension from Los Angeles city.
    That is one of the issues that needs to be addressed by our new city attorney, Carmen, and it is going to take you and me and the rest of us to get him to see our point of view that we
    are free citizens in this wonderful country and
    we are not going to put up with all this “stuff” anymore.
    People who know me know I do not lie. Everything I say is what I believe is true.
    Teddy Howell

  12. Anonymous says:

    So once you have secceded & formed the City of San Fernando, are you going to ban unions, employees, developers, politicians, & special interests. We will all join this utopia.

  13. Anonymous says:

    Gosh, I thank you all for joining in this conversation. I was just adding my two cents worth.
    But since you asked, there is another census next year. The last census I believe told me
    that Canoga Park had 98,000. So we are now
    possibly twice that. The Valley has MORE THAN
    TWO MILLION PEOPLE LIVING IN IT. The city of
    LA probably has five million people. We shall see the figures when the census is finished.
    But you can see all the traffic. So what we need is a city in each of our suburbs. I know that the people in West Hills could manage to form a
    city that would resemble Calabasas(which wisely declined to join LACITY when it established itself.) It is a pleasant place to live. I know Reseda as a suburb of 43 years ago when I had to go to JCPENNY’S to shop for things for my new home. Some of my good friends live in Reseda. I am sure that they would be able to run the gangs out of their town.
    One more thing, I think the schools breed gangs.
    Each city should have its own school district.
    We may all have to buy water, power,and police and fire until we can develop our own departments. Actually, I do not know why it has taken us so long except that we have private lives and it is easier to let someone else do it. Teddy

  14. Mary says:

    Pretty good post. I just came across your blog and wanted to say
    that I have really liked reading your posts. Anyway
    I’ll be subscribing to your feed and I hope you write again soon!

  15. Anonymous says:

    I actually think that we would be better off with a meaningful borough system that leaves a ceremonial mayor, a controller, a city attorney, and a council made of representatives from the boroughs. The council would only run the proprietaries and centralized city services and allocate revenues to the boroughs based upon formula. There would be centralized administration of water, power, sewer, sanitation, police and fire, airport, and harbor.
    Each of the boroughs would have autonomy regarding land use, public works, transportation, social services, parks and recreation (except Griffith Park is centrally administered), with an elected borough council. And each borough would have its own school district with an elected school board. The boroughs would each be roughly 300,000-400,000 people.
    Hey, one can dream. With independently operated boroughs, it is more likely that areas of the City will begin to look more like Glendale, Burbank and other adjoining Cities that are far better run that the City of Los Angeles. The most important issue to the quality of life in cities is control of land use. This currently freaks out the development community but in the long-run it is probably better.
    Let’s do it!

  16. Anonymous says:

    Good morning! Whether the Borough system , which sounds like it may be a good choice and utilizes the current departments intact, or secession, the mayor and city council system
    has proven to have outgrown their usefulness.
    If we find we are all in agreement, and how will we do that? NCs? Petitions? We are so scattered.
    Fourth tea party? Yes, problems, but I can remember a man who told the world (including us
    women) We Shall Overcome!!!!If we talk with each other about possibly the most important issue in our lives and it is not the time to think it rude, as I was carefully taught, there must be a focus point on which we can settle. Ron Kaye
    has brought us this far and I just know he has a personal interest as well, he is doing such a
    wonderful job of sharing the political news with us. And he has found out that there is a result, change has taken place in interest and attitude. But now we also must start. My way of doing things has changed over the years, and I am grateful for this pc so that I share what I have learned with a personal list of acquaintances, friends, neighbors and family.
    That is what we must do. Start spreading the news! Patrick Henry spread the news – read about him if you don’t know about him. He told the revolutionary generals – “One (shot) if by land, two if by sea” meaning the British ships and troops. Good luck to all of us. Teddy Howell

  17. Anonymous says:

    Well, it looks like the Mayor’s call for “shared sacrifice” no longer includes public employees.
    Early retirements only increase long-term pensions costs for a system that is already nearing $2 billion in underfunded liability.
    The promises of no furloughs or layoffs for two years is absurd. Who at City Hall has the crystal ball that forecasted the economy from here on out?
    Once again, a couple hundred colored union t-shirts marching on City Hall (and the significant campaign contributions associated with them) trump the best interests of 4 million city residents/taxpayers.

  18. Anonymous says:

    “Once the full City Council approves the agreement at their Friday session, ballots will go out for a vote of the full membership of SEIU and its partner unions in the Coalition of LA City Unions.”
    That is in the report of SEIU’s proposal to our City Council.
    One would think that union people are not actually citizens of LACITY. They are a group
    that is designated to work for the city (a plum job, by the way, you cannot be fired)) by some
    higher power. If we all worked for a union, we could be fearless also, but then who would pay for all their demands? Which of the rest of us get the long list of benefits that accrue to these people day after day, year after year?
    Something is wrong with this picture. Tomorrow is Friday. What will you advice your City Council member?
    (I found the SEIU site by clicking the address at the end of Ron’s paragraph. It will amaze you and is not unbearably long.) Teddy Howell

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