Last week, LA Mayor Antonio Villaraigosa made headlines by predicting that a large number of layoffs might be required to balance the city budget. Now another official says new taxes are also being considered.
This year, Los Angeles is expected to address a $222 million deficit. But by 2014, that could be nearly half a billion dollars. To help closing the gap, the city is considering about $150 million in new revenue, including a tax on property sales that would bring in an additional $100 million. Other taxes, such as an increase of the parking tax, are being considered.
The city could also save money by postponing or cancelling promised raises to some of its bargaining units. Currently, one union is going to receive an 11% raise over the next two years at a cost of $50 million. Increasing employees’ share of health care premiums by 10% would save another $30 million.
From the L.A. Times:
Los Angeles’ top budget official raised the specter of bankruptcy on Friday in a sweeping report in which he called for new taxes, major pension reform and possibly layoffs.
Chief Administrative Officer Miguel Santana said rising employee costs combined with flat-lining revenues have left the city in a precarious position. Even after reducing its workforce by 4,900 positions in recent years, the city faces a $222-million budget shortfall, he said, a number that is expected to rise to $427 million by 2014-15.
Read the full article here.