Mayor proposes stark cuts

Faced with a budget shortfall that has doubled in three months, Los Angeles Mayor Antonio Villaraigosa called Monday for paring city spending by suspending most hiring, asking thousands of workers to take unpaid furloughs and selling vacant fire stations.

Budget analysts attributed the $155-million deficit mostly to the flagging economy, saying larger than expected decreases in sales taxes, real estate transfer taxes, fees and state reimbursements have left the city $69 million short of anticipated revenues.

Fuel costs and police overtime have driven up expenses more than anticipated.

Despite the troubling financial situation, Villaraigosa pledged to continue his 1,000-officer expansion of the Los Angeles Police Department -- an effort he called key to attracting business, even if it means cutting other services such as street paving and graffiti removal.

“My priority has got to be public safety,” Villaraigosa said at a City Hall news conference. “Keeping the city safe is the answer to how we support revenues.”

Villaraigosa outlined $35 million in cuts as he made a pitch for Proposition S, a telephone users utility tax that is expected to generate $243 million annually. Voters will decide the issue next Tuesday, and the mayor has been arguing that the city will have to slash public safety services if the measure fails.

The proposed cuts come a month after Villaraigosa and the City Council signed off on a five-year package of employee raises that are projected to cost $255 million by 2012.

Villaraigosa and other city leaders are bracing for a gap of at least $300 million, and perhaps as much as $500 million, in the fiscal year that begins July 1.

That could create the city’s largest budget hole in nearly three decades, officials said.

The mayor’s focus on his LAPD hiring promise drew criticism from a member of the City Council’s budget and finance committee.

Councilman Greig Smith, who represents the northwest San Fernando Valley, argued that all city departments should share in this year’s budgetary pain.

“Hiring police officers now is an issue that has to be discussed,” said Smith, one of the council’s most fiscally conservative members and a reserve LAPD officer. “If you are saying don’t touch police, don’t touch fire, that means you’re going to . . . close libraries, stop paving streets.”

The head of the Howard Jarvis Taxpayers Assn., meanwhile, criticized Villaraigosa for using Monday’s news conference to drum up support for Proposition S. Executive Director Kris Vosburgh accused Villaraigosa and the City Council of adding to the city’s fiscal problems by approving the pay raises for municipal workers.

“What he is doing is standard procedure for public officials when they are trying to wring more money out of taxpayers,” Vosburgh said. “That is, they threaten those services we value most. In this case, public safety.”

Los Angeles County government appeared to be in better fiscal shape than the city, even though it too has felt the pinch of the downturn in sales taxes, real estate taxes and state revenues.

The county’s chief executive, William T. Fujioka, said that he was more concerned about a projected $220-million shortfall in state aid, and that cuts probably would be borne mostly by county social service agencies, and food stamps, mental health services and substance abuse programs, among others.

“L.A. City Hall is in much worse condition than L.A. County,” said Fujioka, the city’s former budget analyst. “We’re in a good position to weather this storm.”

Villaraigosa proposed his cuts after City Administrative Officer Karen Sisson released a midyear budget report that revealed the $155-million shortfall.

Sisson said she was less concerned about the rise in expenses than the rapid decline in revenues.

“We didn’t bank on this mortgage crisis, which became a credit crunch, which has rippled through the economy in ways that no one foresaw,” she said.

Sisson recommended a series of measures to reduce the shortfall by $117 million, including the sale of three former animal shelters and a delay in the construction of police and fire stations.

Sisson also was looking at tapping money identified for gang prevention programs and the promotion of tourism in the San Fernando Valley.

The cuts proposed by Sisson and Villaraigosa, which require City Council approval, would still leave the city nearly $3 million in the hole. The mayor did not say how he would make up the remainder.

To reach the $35 million in cuts he laid out Monday, however, Villaraigosa said he would sell 512 city cars, or 5% of the city fleet, for a savings of $3.5 million.

He would suspend city hiring for the remainder of the fiscal year, except for the most critical positions in public safety or those that generate revenue, and suspend nonemergency overtime, saving at least $2.5 million.

In addition, he would sell four vacant fire stations and three vacant animal shelters, to generate another $3 million to $5 million. And he called for the city to pursue the sale of unused libraries, as well.

The voluntary employee furloughs, if successful, would save the most -- $20 million. City workers who do not handle public safety would be asked to take five days off without pay before July 1.

Villaraigosa’s aides said the furloughs could be spread over the next six months to avoid further disruptions in services and to lessen the financial strain on employees.

Barbara Maynard, who represents a coalition of city unions, had no comment on the furlough plan.

But Councilwoman Wendy Greuel predicted that, if done properly, the furloughs would not diminish city services.

“This is a time in which there are no sacred cows. We have to put everything on the table,” said Greuel.

She added that she would not consider any plan that would rework Villaraigosa’s goal of hiring 1,000 new police officers by 2010.

Villaraigosa predicted that residents would feel the effect of his proposed reductions.

“You can’t cut the amount of money we’re talking about . . . and not have it impact city services,” he said, without elaborating.

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duke.helfand@latimes.com

david.zahniser@latimes.com

Times staff writer Jean-Paul Renaud contributed to this report.