Los Angeles city government is in trouble. Projections are that it will face a budget deficit of at least $400 million in the coming fiscal year.
The financial bind in which the city finds itself is no accident. It is the result of a series of conscious decisions by elected officials and bureaucrats.
According to the U.S. Census Bureau public employees in California are the highest paid in the nation. While state workers do well among government employees the city of Los Angeles is considered the "land of milk and honey" due to the high pay and lavish menu of benefits.
Just three months ago the mayor and City Council on a 12 to 0 vote agreed to 25 percent pay raises for 22000 members of six unions representing city employees. This will cost city taxpayers $255 million by 2012. Of course these raises are modest compared to those provided to members of public safety unions Department of Water and Power workers and city department heads.
These sweetheart agreements should be no surprise in a city where the powerful public employee unions go all out to elect their chosen candidates. This way when it comes to compensation negotiations city workers are represented on both sides of the table.
Now that the city is on the brink of the financial cliff hanging on by its collective fingernails Mayor Villariagosa says everything is on the table including "revenue enhancements."
Revenue enhancements? Is the mayor the only person on the face of the planet not to know that he is talking about higher taxes?
Perhaps Villariagosa can take some comfort in knowing that he is not the only politician who has recently advocated higher taxes using euphemisms rather than plain English. Governor Schwarzenegger has suggested we could "close loopholes" as a way to balance the state budget. But we doubt he realized that the tax and spend lobby considers the home mortgage interest deduction to be a "loophole."
Ok we get it. The mayor is considering tax increases. But in a city that is already near the top in taxes aren’t there other options that should also be on the table?
To his credit the mayor has considered a hiring freeze except for police voluntary furloughs for workers — so far there seem to be no takers — and selling off or turning back city vehicles used by staff. However whenever he makes a suggestion that has merit like eliminating taxpayer provided cars some other official rushes forward with an objection such as the city has signed lease agreements that require the cars to be paid for even if they are turned back to the leasing company.
This paralysis preventing action that would benefit the city is reminiscent of the situation faced about a dozen years ago by then Senate leader David Roberti who was looking for ways to divide the Los Angeles Unified School District into smaller more manageable entities. Every time he would make a proposal bureaucrats and staff would rush forward to enumerate all of the insurmountable obstacles. These "obstacles" an irate Roberti concluded where actually created by those who used them as an excuse for inaction.
However the biggest obstacle to balancing the budget is pay. While we are all in this lifeboat together the city worker unions are refusing to help bail.
During the just concluded negotiations for higher pay union leaders indicated a willingness to revisit the agreements if the city found itself in financial trouble. Now we learn that these same union officials are stonewalling until they see actual evidence there will be layoffs if the unions do not make concessions. And because it takes so long to lay off city employees — another of those obstacles mentioned earlier — union leaders believe that the city will recover before their hand is forced.
So there you have it. Taxpayers will be asked to continue to peel grapes for their employees as taxes go up and city services decline.
Jon Coupal is President of the Howard Jarvis Taxpayers Association — California’s largest taxpayer organization — which is dedicated to the protection of Proposition 13 and promoting taxpayers’ rights.