City Budget Challenges & Solutions

By Steven E. Presberg

Proposals for reorganizing the City budget and departments to lower expenditures and balance the budget

We have a structural budget deficit in our City, with projected deficits of between $200 and $300 million each fiscal year for the foreseeable future. This cannot continue.

Yet, each year, the City Council attempts to paint over the shortfall with assorted accounting gimmicks and one-time revenues in order to avoid making difficult decisions - decisions that might upset special interest groups or campaign contributors. Meanwhile, budgets for such essential services as public safety and rescue, street and sidewalk repair, and programs for our elderly and disabled are targeted for cuts.

To a large extent, our City's financial picture is dependent upon forces and economics that we cannot control. An economic downturn in our region, or state, or even nationally and globally will result in a decline in revenues to our City. Our attempts to patch the budget with increases in fees, fines, and other annoyances only serve to discourage economic growth and activity, and frustrate our residents.

I favor a three part approach:

Reform the City Pension Programs.

Eliminate programs and expenditures that either duplicate those provided by another level of government, or that should be provided by another level of government, and determine what functions the City should not perform. Determine those businesses that can be readily attracted to locate in our City, and provide tax incentives that would dramatically boost our share of sales taxes and other economic benefits.

City Pensions

It has been a recurring slap in the face to all of us to read about some public officials retiring with a pension that is larger than they ever earned in salary. However, this is not the case with the overwhelming majority of City pensioners. In fact, most City retirees have modest pensions. In addition, retired public employees either will not qualify for social security, or will receive a reduced amount.

Nevertheless, our City budget is bearing a back-breaking burden each year, because of the requirement of funding the City's pension plans. This annual budget expense has been steadily growing over the years, and is now approximately $800 million. This is more than three times our annual budget deficit, and is not sustainable.

I do not want to harm any City employee's pension that has been earned to-date. But I do want to eliminate the abuses and excesses that are simply not acceptable. No public pension should be higher than an employee's salary. No spiking of pensions ought to be permitted. No double-dipping should be permitted. A City retiree who accepts another City related position should have their pension placed on hold until they are once again retired. No public employee should be able to retire on a full pension at age 55. I fully support Mayor Villaraigosa's proposed reforms, but that won't be enough. I fully support former Mayor Richard Riordan's call for a public referendum on reforming our City pension plans. We cannot afford leaving things as they are.

Duplicate Programs and Expenditures

As our economy slipped into recession, all levels of government have attempted to reduce costs - in many instances by passing budget burdens down to another level of government. The federal government cuts allocations to the states, and the state government reduces allocations to Counties and Cities. Since we are located at the bottom of this budget food chain, we in the City of Los Angeles suffer the most. It's time we turned things around and stopped accepting such burdens.

We have to scour our City structure in order to not provide services that are already being provided, or should be provided, by another level of government.

We should not simply decide to arbitrarily impose layoffs across the board, but rather, make reductions in areas that we determine are not priorities for the use of taxpayer money.

Attract Businesses

I am in favor of a phasing out of the Gross Receipts Business Tax. This cannot be done instantly, inasmuch as it constitutes some $450 million in annual revenue at present. In order to ensure that we get the maximum boost in economic activity from the elimination of this tax, a phase-out should target those industries and businesses that will show an upturn of activity and generate a positive increase in sales taxes, payrolls and other economic gains. I fully support Mayor Villaraigosa's initiative to eliminate the Business tax on new car dealers, as we stand to gain far more revenue in sales taxes by luring these businesses back into our City. I want to do the same with a wider group of businesses and really stimulate jobs growth in our City.

Bold Ideas for Rescuing our Budget

Jails

Why do we have City Jails? No, I'm not in favor of letting criminals run free. However, we have a very costly and seemingly useless approach to criminal justice in our City.

We operate four City Jails, each with a full roster of Detention Officers, Police Officers, medical staff including doctors and nurses. But no arrestee spends more than two or three days in a City Jail. Nor does anyone ever serve a sentence in a City Jail, or even await trial in a City Jail. When LAPD makes an arrest, the suspect is brought to the City Jail and all of its attendant costs and bureaucracy. The suspect either makes bail, or is shortly transferred to the County Jail complex, where the Sheriff takes custody of the suspect. Instead of having this two-part bureaucratic shuffle, why can't LAPD simply bring a suspect who has been arrested directly to the Sheriff's custody at the County Jail? If the Sheriff needs more jail space, we could offer to lease our City jail facilities to the County, and earn some much needed revenue.

Animal Services

I am absolutely appalled at the revelations of abuse and corruption at the facilities run by our Animal Services Department. I am an animal lover and an animal appreciator. These creatures did not ask to be brought into our world, and they too often are relegated to a life of abuse and or neglect. I have a high regard for General Manager of Animal Services Brenda Barnett. But regrettably, our Animal Services Department for more than a decade has been unable to reverse this situation. I believe that the task of maintaining shelters for stray animals, for regulating pets, for investigating and preventing or punishing cruelty to animals is inherently a County-wide function. We should consider a phasing out of this City function and compelling the County to fulfill its mandate throughout the County - including our City. Once again, if the County required additional facilities, we could offer to lease our existing facilities to them.

Fire Fighters and Emergency Medical Services

I fully salute the bravery and dedication of our emergency services sworn employees - our dual trained firefighter/paramedics. However, I am completely baffled by our continuing to pay these brave souls for sleeping. Yes, that's what we do. A typical firefighter works a continuous 24- hour shift (frequently combining these shifts into a longer shift in order to earn overtime pay), and is indeed "on-duty" for any calls that may come in to respond to fire and/or medical emergencies. But much of this "on-duty" time is "down-time" - or more precisely, sleeping time. We cannot afford to pay our public safety sworn staff to be sleeping up to one-third of the time they are "on-duty." We have seen recently that the Fire Department is unable to accurately measure their own response time for emergency calls. We rightfully demand the swiftest response when lives and property are in danger. We must stretch our available resources as far as possible, and we do not have the luxury of doing business as usual. This includes maintaining sleeping quarters in Fire stations.

Our Police Officers typically work a 10 or 12 hour shift, during which they are continually on duty or on patrol. There are no permanent sleeping quarters in Police Stations. Firefighters should work similar 10 or 12 hour duty shifts during which they will be on full duty. This one change by itself, from the current operation, will have the effect of increasing our emergency response coverage by as much as 25% to 30%. Additionally, sending two fire vehicles and the accompanying personnel to EVERY medical call is a waste of time and talent. EMS and Fire are cross-trained, and an additional level of Medical Assistant needs to be integrated into the EMS system to spare Firefighters from answering non-fire emergency calls to focus on response time and training.