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LA WATCHDOG - On Monday night at 5:30, Mayor Karen Bass will deliver her State of the City address. One of the key features will be how the City intends to fund this year’s budget shortfall of an estimated $300 million and next year’s budget gap of an estimated $800 million.
Underlying this river of red ink are the budget busting labor agreements approved by the Paul Krekorian led City Council and Mayor Bass, lower revenues than planned that were overly optimistic to begin with, and over expenditures for the Fire Department and litigation related liability claims.
Balancing the budget will require significant gymnastics. These include eliminating 2,000 vacant positions; a continued hiring freeze; raiding the Reserve Fund and possibly the Budget Stabilization Fund; significant increases in the Sewer and Solid Waste Recovery fees that are on our bimonthly DWP bill; a reduction in service levels such as the repair and maintenance of our streets, sidewalks, and parks; funding the homeless services and housing program by relying on the Measure ULA tax revenue on property sales of $5 million of more despite the overhanging litigation; placing a measure on the ballot to approve the issuance of another series of bonds to fund interim and permanent supportive housing for the homeless; and who knows what other creative solutions the wizards at City Hall will devise.
The fiscal irresponsibility of the City Council and the Mayor demands reform.
A good place to start is with the recommendations of City Controller Kenneth Mejia. These include the development of a five-year strategic approach to fiscal sustainability plan, two-year budgeting, the implementation of a realistic capital improvement plan, the appointment of a chief financial officer, and expanding of the participatory budgeting pilot program.
[Note: On Thursday night, Mejia hosted a well-attended Town Hall where he discussed the City’s budget process, projected deficit, and answered numerous related questions for two hours. More Town Halls are expected.]
There are other financial and budgetary reforms, including prohibiting the City from entering into budget busting labor agreements that create deficits, open and transparent labor negotiations, creating a Reserve Fund that is used only for emergencies, and the establishment of an independent Office of Transparency and Accountability to oversee the City’s budget and finances and recommended by the blue ribbon LA 2020 Commission.
There is a high likelihood that the City Council will not act on needed financial and budgetary reforms. And if so, Angelenos will be justified in rejecting any ballot measures that call for tax increases.
Note: There are other areas of reform that the Mayor needs to address, including ethics reform as recommended by Paul Krekorian and the Los Angeles Times and tort reform, especially considering the adverse judgements and settlements that will cost the City $200 million this year, double the amount in the City’s budget.
(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].)
