Villaraigosa expects better economy to halve budget gap
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Two days after voters rejected a proposal to increase the city’s sales tax to address a budget crisis, Los Angeles Mayor Antonio Villaraigosa said stronger revenues and an improving economy could cut this year’s financial gap by more than half.
Villaraigosa, who endorsed the plan to take the sales tax from 9% to 9.5%, said Thursday that a brighter financial outlook could take a looming deficit from $216 million to less than $100 million for the fiscal year that starts July 1.
“The economy’s getting better,” he said. “So I don’t expect that we’re going to have draconian cuts.”
Voters rejected Proposition A by 55%, according to unofficial results. City Administrative Officer Miguel Santana, the top budget official, responded to that vote by announcing that he would offer a menu of potential budget cuts within a few days. Santana said the size of the police force and funding for street repairs should be ‘back on the table’ for discussion.
Villaraigosa will present his final budget next month. His analysis Thursday was similar to one provided last month by his onetime budget advisor, former Deputy Chief of Staff Matt Szabo. Szabo, then running for City Council, said the city’s budget shortfall was $100 million lower than the figure being used publicly by proponents of Proposition A.
Szabo, who opposed the sales tax hike, pointed to Santana’s last budget report, which noted that pension costs were $45 million lower than previously forecast and other revenue as much as $70 million higher than expected. When The Times asked him about Szabo’s remarks last month, Villaraigosa accused the reporter of trying to create a controversy.
On Thursday, Villaraigosa said he attended a three-hour meeting last week with a group of economists that focused on Los Angeles County. “I expect things are going to be a little brighter than one might have thought,” he said.
Much of the Proposition A campaign was built around warnings that more money was needed to cover police, fire and paramedic services. On TV ads for the ballot measure, Police Chief Charlie Beck said public safety services were in danger. In other appearances, Beck warned that the city would have to reduce the size of the LAPD by 500 officers, 200 of them through layoffs, without the revenue generated by a tax hike.
Stuart Waldman, president of the Valley Industry and Commerce Assn., said Villaraigosa’s remarks make it clear that the city didn’t need the half-cent sales tax hike. Waldman’s group was opposed to Proposition A and had argued that the city should pursue other cost-saving measures, such as privatization of the operations at the zoo and convention center.
“I never believed they were going to reduce any officers,” Waldman said.
Asked about Beck’s police layoff warning, Villaraigosa said the city still faces tough budget years in the future, in large part because of rising retirement costs for city employees. Those costs mean that every employee, including police officers and firefighters, should contribute more toward their retirement benefits, Villaraigosa said.
‘We’ve got to do more. That’s just a fact,’ he said.
City Councilman Paul Koretz argued that, even with the rosier projections, the city should trim the size of LAPD staffing. Koretz said the city should halt police hiring now and revisit the issue in May, when the council takes up Villaraigosa’s final budget proposal.
‘Even if [the shortfall] winds up being around $100 million, it’s not like that’s wonderful,’ he said. ‘That’s still $100 million from a budget that’s already bad and has been cut to the bone for every department.’
-- David Zahniser at Los Angeles City Hall