Former Villaraigosa aide opposes tax, says budget woes overstated

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One of Los Angeles Mayor Antonio Villaraigosa’s former high-level budget advisors said Sunday that city officials are using ‘fuzzy math’ to overstate the size of the budget shortfall, even as they press voters to pass a sales-tax hike in the March 5 election.

Matt Szabo, who served until last summer as Villaraigosa’s deputy chief of staff, said a new financial report indicates that the budget shortfall for the upcoming year is less than half the $216 million figure that has been used repeatedly by budget officials in recent months.


City Administrative Officer Miguel Santana, the top budget official, warned in a report last week that a defeat of Proposition A could lead to cuts in park hours, police staffing and other services. But Szabo said Santana’s own report states that pension costs for the upcoming year will be $45 million lower than expected and that at least $70 million more may be available to erase the shortfall.

‘If we’re making an argument that failure to pass a tax increase will result in drastic cuts, then the numbers the city uses had better be accurate. And I don’t think they are,’ Szabo said. ‘The question people need to ask is, is [the shortfall] being overstated for the purpose of passing the sales tax?’

Szabo, one of 12 people running to replace Councilman Eric Garcetti, handled budget issues for Villaraigosa before resigning last summer. He made his remarks a day before the mayor was slated to appear at a news conference endorsing the tax.

Santana said he kept his projection for the shortfall at $216 million because he does not yet know how much expenses will rise in the coming fiscal year, which starts July 1. Even with the additional money cited by Szabo, the city will still have a gap, he said in an email. ‘The sales tax proposal is not just about eliminating the threat of further cuts over the next 12 to 48 months, but about making major progress toward the long-term fiscal health of the city,’ Santana said.

If passed, Proposition A would generate roughly $215 million per year and leave Los Angeles with one of the highest tax rates in the state. While some union and business leaders have endorsed the measure, it has been criticized by several candidates running for City Council.

Szabo said Proposition A would deliver a ‘sucker punch’ to low-income communities,’ especially if L.A.’s elected officials move ahead with efforts to cut or eliminate the gross receipts tax on businesses. ‘You do the math,’ he said. ‘We’re going to take from one group and give to the other.’



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-- David Zahniser at Los Angeles City Hall