Originally posted at City Watch LA.
By Jack Humpreville.
On Tuesday at the Mayor’s budget town hall in Hollywood, Rick Cole, Eric Garcetti’s Deputy Mayor for Budget and Innovation, did not offer any concrete solutions to next year’s projected budget deficit of $250 million.
But that does mean it is going to be business as usual. Under the newly instituted Performance Budgeting program, the City’s scarce resources will be directed to the highest priority goals and outcomes while lower priority activities will be either reduced or eliminated. At the same time, results will be closely monitored and evaluated and will be made available to the public.
While Performance Budgeting focuses on “What Matters Most” to Angelenos, this new program is not a silver bullet that will solve the City’s financial woes in a year. Rather, it is the beginning of a process that will allow the City to get a better understanding of its operations and finances.
Importantly, Cole, a well-respected budget expert based on his experience in Ventura County, recognized that during this transition period, the City would need to earn our trust before it asks us to approve any new revenues, such as the $4.5 billion Street Repair Tax.
Mayor Eric Garcetti has established at least four priority outcomes: promote good jobs for all Angelenos, restore basic City services, insure public safety, and create a more environmentally sustainable and livable City.
While Performance Budgeting and its emphasis on measurable results appears to be a worthwhile and long overdue innovation, the basic question remains. How does Garcetti intend to achieve his priority outcomes and at the same time eliminate next year’s deficit of $250 million and the $700 million cumulative deficit over the next four years?
At the same time, there is pressure from City Hall and numerous special interests to increase spending, especially since the financial wizards on the City Council have seen an influx of cash in Sacramento. But that is not the case in Los Angeles as modest increases in property and sales taxes offset some of the onetime revenue sources that the City relied on last year to balance the budget and fund the Reserve and Budget Stabilization Funds.
The Police and Fire Departments are looking for more money to improve response times and replace outdated black and whites and fire engines.
The Progressives are angling for more programs to help the less fortunate residents of our City, including more affordable housing and services to the homeless.
The politically powerful environmental lobby has a very expensive laundry list of projects for the City and our Department of Water and Power, including moving towards zero waste, increased development of local water sources, even more renewables, and the restoration of the LA River.
The City also needs to update its Stone Age management information systems so that it can better monitor its operations and finances.
Then we have the real estate developers who are always looking for tax breaks and favorable zoning variances, regardless of the impact on our neighborhoods and traffic.
Garcetti is also considering the phase out of the $470 million gross receipts tax, not that it will do that much to create employment opportunities since our business unfriendly State’s burdensome regulations and high taxes are the real job killers.
And finally, over the next four years, salaries, benefits, and pension contributions for City workers are expected to increase by almost $500 million, once again outstripping the growth in revenues.
While these budget challenges are daunting for our new mayor, we need to remember that Garcetti is one of the primary culprits of the City’s financial mess as he was the President of the City Council when the City approved the budget busting labor contracts.
In less than three months, Garcetti will present his budget to the City Council. Two weeks earlier, the LA 2020 Commission headed by Mickey Kantor and Austin Beutner, as a follow up to its excellent, hard hitting report, A Time for Truth, will present concrete recommendations on how to balance the budget, restore City services, and put the City on a path to financial sustainability.
Of course, we, the voters, taxpayers, and ratepayers, are caught in the cross fire between the self-serving warring factions who want nothing more than to pick our pockets. But rather than keeping us in the dark, it is time for Garcetti and his budget team to tell us the truth about our City’s financial mess and how they propose to have the city live within its means.
If the City wants to earn our trust and confidence, it is time for truth.