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Wed, Apr

Reform Needed to Protect Angelenos’ Wallets from City Hall and Public Sector Unions

LA WATCHDOG

LA WATCHDOG - The City Council and the Mayor have the nasty habit of approving budget busting labor agreements negotiated behind closed doors that result in significant deficits.  This causes budget crunches, a lower level of services such as the repair and maintenance of our streets, sidewalks, and parks, and a call for increased taxes and fees. 

Enough is enough.  There is a crying need for reform that would prohibit the City from entering into labor agreements that result in deficits, provide for open and transparent labor negotiations, and multiyear budgeting.  

This year, Mayor Bass and the Krekorian led City Council approved budget busting labor agreements with the City’s public sector unions (police, civilian workers, and soon, the fire fighters) that blew a massive hole in this year’s “balanced” budget and well as for the next four years.  

According to the Second Financial Status Report, this year’s budget is $300 million below plan because of lower-than-expected revenues ($158 million) and over expenditures ($143 million).  

Next year, the City anticipates a budget gap of $400 million which will have a negative impact on the City’s homeless budget and its ability to fill 4,800 vacant positions. 

Over the next four years beginning on July 1, 2024, the City was projecting an average annual surpluses of $275 million.  As a result of the new labor agreements, the City is now looking at average annual deficits of $425 million, a swing of $700 million a year. 

In the fall of 2019, the Herb Wesson led City Council and Mayor Garcetti entered into budget busting labor agreements which blew a $150 million hole in the current year’s budget and created a river of red ink over the following four years where the average annual deficit was $300 million as opposed to the pre-contract average annual surplus of $50 million. 

In both cases, the City Council did not disclose the impact of these agreements on the City’s current budget and the outlook for the following four years or provide us with an opportunity to comment.  

One reform would prohibit the City from entering into any new labor agreements that result in a deficit in the current fiscal year and in future years unless approved by the voters.  This would require City to prepare budgets that assumed existing service levels, provide resources to maintain the City’s infrastructure, make its annual pension contributions, and adhere to its existing financial policies. Citizens would have the right to challenge these budgets in court where the burden of proof is on the City. 

The City would also be required to adopt a Civic Openness in Negotiation ordinance as previously recommended by the Times.  This may involve the use of independent third-party negotiators, an independent analysis of any new labor agreement and the impact on the city’s finances, and the disclosure of offers and counter offers.  The City would be required to provide adequate time for the public and media to review and analyze the labor agreements and for public comment. 

Another reform would require the City to do multiyear budgeting, a policy recommended by City Controller Mejia and by the LA 2020 Commission that was chaired by Mickey Kantor and Austin Beutner.  

The City will most likely not agree to these reasonable and transparent recommendations, in large part because of the vigorous opposition of the public sector unions.  We would be lucky if they even discussed these recommendations.  At the same time, we do not have to approve of any new taxes that the City will place on the ballot that will pay for the budget busting labor agreements. 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)

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