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LA’s Rite of Spring: Hiding the Budget Deficit

Every spring for the last three years, the City Council’s
Budget Committee has taken up the mayor’s spending plan for the next fiscal
year amid warnings that drastic actions need to be taken or next year will be

It’s next year again and things are worse – the budget
deficit for 2011-12 has swollen to nearly half a billion dollars, more than 10
percent of the entire general fund budget. And next spring, the deficit for the
following year will be even worse.

Bernard Parks’ Budget Committee holds its first in a
weeklong series of public hearing at 1 p.m. today to review the mayor’s
proposal that tries to undo some past mistakes like closing libraries two days
a week and leaving potholes unrepaired while making at least a dent in the
underlying structural deficit.

It is a fragile document, a house of cards that could
collapse if any one of a large number of variables goes wrong.

Start with the deal for members of the 18 units of the
Coalition of City Unions to start paying for a portion of their lifetime health
care by contributing 4 percent of their salaries – a $69 million savings to the
general fund this year.

The votes are coming in and at least one unit, the City
Attorney’s office voted 248 to 143 (LACAA PRESS RELEASE.pdf) to reject the deal which union leaders
negotiated under the threat of workers facing 36 furlough days over 12 months,
a 15 percent loss of pay.

If several other units also reject the deal, it will unravel
efforts to get police and fire unions to negotiate similar deals to increase
their contributions to pension funds.

Without those savings, there will be more furloughs, even
layoffs. Libraries won’t reopen, parks programs will be cut further, workers
won’t be at their jobs, city operations will become even more chaotic and
inefficient than they are.

It is all inter-connected.

Assume though that the savings from employee contributions
materialize for the most part and raises in salaries for many are deferred a
year, what’s left to quarrel about is just 15 percent of the total budget since
85 percent goes to salaries, pensions and benefits.

That 15 percent isn’t enough to fix the streets, trim the
trees or provide other basic services at an adequate level let alone provide
summer jobs to kids in gang-infested neighborhoods or get the homeless off the

We are all reduced to the status of starving rats fighting
over scraps.

Even with these contributions and other steps, next year
will be worse because  the cost to
taxpayers for salaries, pensions and benefits keep rising while revenue remains
flat and could even decline if the tepid economic recovery stalls.

Every spring the warnings sounded by Assistant CAO Tom
Coultas at the start of the recession keeps resonating.

And yet, the mayor and Council have not put forward a
comprehensive solution that will actually bring the budget into balance and
allow the city to more forward.

No less that former First Deputy Mayor Austin Beutner has
told many people that he expects the city to run out of cash by next spring and
be forced into bankruptcy.

If this proposed budget doesn’t fall apart, City Hall may
survive the fiscal year and the house of cards might not come tumbling down
until the middle of the next mayoral election in 2013.

Short of economic miracle only dreamers hold out hope for,
the day is coming when LA can not pay its bills.

You would think the inevitability of that day of reckoning
would prompt the city’s leaders to stop procrastinating and dreaming and get
down to work starting today to develop a strategy that ends the city’s downward

MAY 5, 2009

DEC. 12, 2009

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3 Responses to LA’s Rite of Spring: Hiding the Budget Deficit

  1. Anonymous says:

    Look at the list of incompetent morons who have this financial mess. Bitter Bernie chair of Budget & Finance sat on his butt and rubbered stamped too many motions sending them to the council for full vote spending millions. Wendy Greuesome with all her audits has also sat on her butt doing nothing and hasn’t put forward one single solution how to collect money knowing millions are due to the city. Then we have the Failure of Mayor which doesn’t need explanation, he’s as corrupt as they come. The City Attorney allowed a $2 million settlement instead of settling for $500,000 saving the city money because he’s an arrogant ass. LA is in deep trouble because there is no leadership in any top city dept. There are community members who could do a better job fixing the budget then these clowns.

  2. Ms. Anonymous says:

    Of course they’ll never do this, but they could go all NFL on the unions and lock them out.
    Execpt for police, fire and trash collectors because we can’t live without them, the City tells all the other unions, “Hey, guys, it’s a 4% contribution to your health care (the private sector employees pay far more) or 0% salary.”
    I’m sure there are thousands of qualified people in the city who’ve lost private sector jobs who would love those city jobs with no contracts, with paying a hefty percentage of their salaries in health insurance and getting Social Security, rather than the cushy pensions paid for by us no-damn-good tax payers.

  3. Anonymous says:

    Ms. Anonymous @ 10:37 a.m.
    Why not make a “clean sweep” of things? Hire private security to replace the police, require homeowners to contract for their own trash removal (or just let it pile up), and require neighborhoods to manage their own fire and paramedic services.
    Does your police, fire, and trash collector only workforce apply to those exact positions? If this officer has to answer emergency calls, maintain his own vehicle, fix building problems in his precinct, collect and test whatever evidence he finds, research specifications and get bids for equipment he will need, pay himself and send off the proper amounts to State and Federal Government, how much time will he have to protect and serve?

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