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LA WATCHDOG - The City’s Council’s Revised Budget is a vast improvement over the Mayor’s Proposed Budget because it results in 1,000 fewer layoffs and “reprioritizes” funding towards core services such as maintaining our streets, sidewalks, and parks and public safety. But it does not address the need for major structural reforms as recommended by the Chief Legislative Analyst so that we do not have to endure another self-inflicted fiscal crisis.
The Revised Budget is not sustainable, a fact recognized by the Budget Committee. There are questions regarding revenues, especially since we are not seeing very many Canadian and Chinese tourists. The odds of a recession have increased at the same time as fewer containers are being unloaded at the Port of Los Angeles. Liability claims related to legal settlements and judgments are understanded by at least $100 million. There is strong possibility of over expenditures, a chronic problem for the Police and Fire Departments, the Mayor’s office, and the City Council. There is also the need for the City to pay its bills on a timely basis, including its past due payable of $125 million owed to the Department of Water and Power.
The Mayor is advised to agree to the Revised Budget. Otherwise, it will result in even more criticism of her Proposed Budget that was developed with little thought as to the consequences to public safety and core services.
In her budget message, the Mayor should endorse the City Council’s call for concessions from the City’s public sector unions related to their generous labor agreements. These would allow the City to fund the estimated 650 layoffs, including 270 civilian employees in the Police Department.
She should also call for major structural reform since the status quo is no longer tenable. Like last year, the Mayor believes that the City will overcome its Structural Deficit because the Four-Year General Fund Budget Forecast shows a surplus of $454 million for the fiscal year 2029-30. But when adjusted for future labor agreements, this surplus evaporates and turns into a shortfall of over $100 million.
Will the Mayor and the City Council endorse real reform as recommended by the Neighborhood Council Budget Advocates and others? Will they address the two main responsibilities of the City, public safety and the maintenance of its infrastructure and recognize that the City is not a social services agency. Or will it continue to kiss the rings of the campaign funding union bosses.
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The Neighborhood Council Budget Advocates have recommended seven reforms.
- The Four-Year General Fund Budget Outlook needs to be updated to reflect anticipated raises for City employees.
- Develop a two-year budget as recommended by the City Controller.
- Conduct open and transparent labor negotiations that require significant outreach to Angelenos before, during, and after the negotiations.
- Place a measure on the ballot that would prohibit the City from entering into any labor agreement that would create a current or future deficit. In the short term, pass an ordinance.
- Develop a long-term infrastructure plan to address deferred maintenance and future capital expenditures.
- Create a robust Reserve Fund that can only be used in declared emergencies, not to balance the budget as is the current procedure.
- Establish an Office of Transparency and Accountability as recommended by the LA 2020 Commission to oversee the City’s budget and finances in real time.
(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].)
