CommentsLA WATCHDOG--On April 9, 2014, almost two years ago, the Los Angeles 2020 Commission recommended unanimously that our City create an independent Office of Transparency and Accountability to review and analyze the City’s budget and finances and the efficiency of its operations. But this recommendation, along with other constructive, easy to implement measures contained in the LA 2020 report, A Time for Action, was buried in the bowels of City Hall, never to be heard of again.
However, in face of polling numbers that indicate declining support for the two November ballot measures, Metro’s half cent increase in our sales tax to fund mass transit projects (and a few pet projects) and the City’s half cent bump to support its ten year, $1.85 billion homeless initiative, that would propel our sales tax to 10%, one of the highest rates in the county, City Council President Herb Wesson and Mayor Eric Garcetti have resurrected the four budget related recommendations of the LA 2020 Commission in an effort to buy our support.
In addition to the Office of Transparency and Accountability, the City will establish a Commission for Retirement Security to review the status of the City’s two seriously underfunded pension plans and make recommendations on how to “achieve equilibrium on retirement costs by 2020.”
The City will also review its overly aggressive Investment Rate Assumption of 7½% for its two pension plans with the intention of lowering the rate, over time, to a more realistic 6% as recommended by Warren Buffett, the most successful investor of our times. However, as Wesson and Garcetti pointed out, this will require the City to increase its pension contribution by an estimated $400 million a year, a politically difficult decision that they endorse so that we do not burden the next generation of Angelenos with an enormous debt.
Finally, Wesson and Garcetti will sponsor a “Truth in Budgeting” ordinance mandating that the City develop its annual budget in conjunction with a three year plan that will allow the City to better understand the long term implications of its policies.
In announcing these recommendations to increase transparency and to reform the City’s financial policies, Mayor Garcetti said these four budget recommendations are an integral part of his “Back to Basics” policy of requiring the City to live within it means. He also thanked Herb Wesson for his hard work in persuading the skeptical leaders of the City’s powerful labor unions that these reforms are in the best long term interest of the City, its workers, and the public sector unions.
But as we all know, if it is too good to be true, then it is April Fool’s Day in the City where the Angels do not occupy City Hall.
This April Fool’s rant highlights how Garcetti, Wesson, and the rest of the City Council take us for a bunch of clueless fools who will continue to be bamboozled by their eloquent rhetoric and charming ways into approving massive increases in our taxes without real reform of the City’s finances - foolish financial follies that are characterized by a river of red ink, continuing Structural Deficits, budget busting labor contracts, lunar cratered streets and broken sidewalks, and $15 billion of unfunded pension liabilities, all of which will devour the future of the next generation (or two) of Angelenos.
We have been fooled too many times to be fooled again.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected].)
-cw
