Saying the city must walk a "financial tightrope," Mayor Tom Bradley on Friday unveiled a 1990-91 budget that includes a first-ever parking tax aimed at people who drive to work, a 10% business tax increase and a doubling of fees paid for sanitation trucks.
The top priorities in the proposed $3.68-billion budget are the Police Department, which would be allotted 400 new officers, and the Fire Department, which would receive 115 additional emergency medical service positions.
The balanced budget represents a 12.8% increase from the 1989-90 fiscal year and must be approved by the City Council. The current budget runs through June.
The proposed parking tax--which would bring in $22.5 million--would affect virtually all who pay to park their cars in the city, including people who pay to park in lots and garages owned by their employers. The tax would be added to the parking charge: For example, a $5 charge would cost the driver $5.50.
While the new taxes and higher fees would bring in an additional $59.3 million, cuts in existing services are necessary, Bradley said. He already has instituted a hiring freeze that is to last until June 30, the end of the fiscal year.
The budget, Bradley said in a letter to the City Council, is "an attempt to maneuver a soft landing in an attempt to prevent an otherwise unavoidable crash later."
"It will require a significant sacrifice from almost every other department," he said.
In the new budget, tree-trimming services would be reduced, fewer traffic signals installed, fewer library books purchased, and a swimming program eliminated.
An after-school program for disadvantaged youths, which Bradley pledged to increase a year ago in his inaugural address, would be cut by $1 million to $3.5 million.
In addition, golfers may face higher greens fees on city courses and the cost of admission to the Los Angeles Zoo and Griffith Observatory could go up, a park spokeswoman said.
On Monday, the council is to begin a series of hearings on whether to approve Bradley's budget proposal.
Last year, in one of the least contentious budget debates in recent years, Bradley's $3.25-million proposal emerged from the council largely intact. Bradley vetoed 16 changes made by the council, which then overrode only two of the vetoes.
Several council members said Friday that they had no comment on the new proposal because they had not had time to analyze the document.
"We have a severe problem right now," Council President John Ferraro said. "The mayor took a step a few weeks ago to freeze hiring. That's the first step, but maybe we should have done that a few months ago."
Councilman Zev Yaroslavsky, who will preside over the budget hearings, said the city is in "a grave financial situation"' that will require deep cuts in the budgets of city departments.
"We have one of the highest-taxed cities in America right now," Yaroslavsky said.
Twenty years ago, an attempt to impose a 25% parking tax prompted a public outcry and was defeated by the City Council. But commuters now are traveling much greater distances, and Bradley said Friday that a parking tax would force people who drive into Los Angeles from elsewhere to help pay for city services.
The 10% hike in the business tax will be applied to the gross receipts of all who operate businesses in the city.
Companies were slow to react to the proposed hike on Friday, but James R. Hunter, president of the Central Cities Assn., said any tax increase could have a negative effect on the business climate.
"As we move toward times that aren't as profitable as they were in the 1980s, the bitter pill that the city has to swallow is also a bitter pill for business," Hunter said.
Wholesale businesses, which are now charged $1.075 per $1,000 of gross receipts, would have to pay $1.1825. Lawyers and others in professional occupations now pay the highest rate--$5.375 per $1,000 of gross receipts--and would have to pay $5.9125.
The hike in fees for sanitation trucks would bring in $9.8 million and would be added to Department of Water and Power bills, city Administrative Officer Keith Comrie said. The fee, now $1.50 a month per household, would jump to $3. Apartment renters who do not have private garbage services would pay $2 a month instead of $1.
The overall budget picture could become even more bleak if voters reject Proposition 111 on the June 5 ballot, Bradley said Friday.
State law imposes a limit on how much local governments may spend, and the city will exceed its limit in the 1991-92 fiscal year, he said. Bradley urged passage of Proposition 111, which, among other things, would raise the limit the city can spend.
"If that proposition does not pass, we are in serious straits in this city," Bradley said.
Substantial budget cuts, a continued hiring freeze and possible Police and Fire Department layoffs could be necessary, he said.
The city's financial troubles are the result of a number of factors, including a softening of the local economy, a 25% increase in health care costs for city employees and the unanticipated loss of a $32-million lawsuit filed against the city by retired firefighters and police officers.
Through a charter amendment approved by voters in 1982, the city had attempted to impose a cap on cost-of-living pension increases for firefighters and police officers hired before 1981. But the U.S. Supreme Court refused to hear an appeal of the case earlier this year, in effect making the city liable for the $32 million.
The city has also been hit by changes in workers' compensation laws that will cost an unanticipated $13 million.
Police Chief Daryl Gates said in a statement Friday that he is "gratified" that his overall budget would be increased under Bradley's proposal, but complained that it contains a "counterproductive" cut in overtime pay.
Fire Chief Donald Manning said he was pleased with his proposed budget allocation because it would help cut emergency response time.
Under the proposed budget, the Bureau of Sanitation is one of the few departments that would be spared any cutbacks, and $40 million was included in the budget to finance a new recycling program scheduled to begin in the fall.
THE PROPOSED LOS ANGELES CITY BUDGET
Following are highlights of Mayor Bradley's 1990-91 budget proposal. Spending figures are compared to the previous two years. Last year's budget was $2.9 billion, this year's budget is $3.2 billion and the budget proposed for next year totals $3.6 billion. Fire Department: Last Year 1988-1989: $204.7 Million This Year 1989-1990: $227.0 Million Next Year 1990-1991: $246.7 Million
The Fire Department proposes to add 115 paramedics to lessen the time it takes to reach heart-attack victims; 16 new ambulances to replace nine ambulances staffed with overtime and part-time workers; upgrade existing fire companies in eight low-demand areas to handle paramedic calls in addition to fire calls; create a program to educate the public on proper use of the emergency 911 telephone system, and improve the management capability of the emergency medical services bureau office.
General Services: Last Year 1988-1989: $168.3 Million This Year 1989-1990: $173.0 Million Next Year 1990-1991: $183.4 Million
The budget includes maintenance for 775 vehicles and construction equipment authorized in 1989-90, new and replacement communications equipment and 145 new positions.
Police Department: Last Year 1988-1989: $487 Million This Year 1989-1990: $528 Million Next Year 1990-1991: $565 Million
The Police Department would add 400 new officers and 66 civilian employees and replace two helicopters and 345 high-mileage police vehicles.
Street Maintenance: Last Year 1988-1989: $80.3 Million This Year 1989-1990: $86.1 Million Next Year 1990-1991: $87.3 Million
The budget increase would pay for a new computerized permit system, cash register, personal computers, 1,000 litter baskets for residential neighborhoods, miscellaneous equipment and 28 new positions.
Recreation and Parks: Last Year 1988-1989: $78.0 Million This Year 1989-1990: $87.1 Million Next Year 1990-1991: $90.9 Million
The budget proposes 17 additional staff members to maintain and operate new and enlarged facilities, additional children's playground equipment, an advertising campaign for the Los Angeles Zoo and supplies for construction and landscaping.
Compiled by researcher Cecilia Rasmussen