Cutbacks, New Taxes Seen in Mayor’s Budget

Mayor Tom Bradley is preparing to announce some of the largest budget cuts and tax increases in Los Angeles history in an effort to slash a projected city deficit of at least $100 million, officials said.

The mayor is said to be considering the first cutbacks in police, fire, library and parks departments in more than a decade.

Homeowners are likely to be assessed a trash collection fee for the first time, and new taxes on tickets to movies, ballgames and concerts are possible, according to interviews with city analysts.

“The word is,” said Councilwoman Joy Picus, “it will be the worst (budget) ever.” Or, as one council aide said: “I don’t see how to (balance the budget) without cuts in the sacred cow departments. . . . It’s open season on everything.”

Although few departments are expected to escape cuts in their work force, city fiscal experts said layoffs probably will be averted through the current hiring freeze and normal attrition.

A moribund real estate market, slumping retail sales and other recession-related slowing in the economy have combined to produce one of the smallest increases in tax revenues since 1982. According to estimates by Controller Rick Tuttle, the city’s general fund will grow by just 4.7% in fiscal year 1991-92, which begins July 1.

With its costs climbing steadily--fueled in large part by a 5% across-the-board wage increase set to go into effect July 1 and a 5.9% local inflation rate--the city is facing a projected deficit of $100 million to $150 million, according to estimates by the city administrative officer.

“This is probably the toughest budget since 1978,” when Proposition 13 tightened tax money at all levels of government in California, said Keith Comrie, city administrative officer.

Under the City Charter, Bradley has until April 20 to submit a balanced budget to the City Council, which has six weeks to put its mark on the inch-thick document that details the raising and spending of an estimated $3.6 billion. Bradley will probably unveil his budget later this week.

Although specific cutbacks have not been revealed, Bradley has asked department heads to help assess the impact of various proposals:

* The Police Department was asked to determine the impact of cuts of 100, 200, 300, 400 and 500 sworn officers out of 8,300. The department was also asked to report on the impact of not replacing three aging helicopters.

* The Fire Department was asked to consider shutting down some fire stations, closing two battalion offices and authorizing building managers to conduct their own safety inspections to reduce the workload on department staff.

* The Bureau of Sanitation was asked to consider going to a biweekly trash collection schedule from the existing weekly schedule.

* The Department of Recreation and Parks was asked to report on the possibility of limiting some facilities to peak hours and charging higher fees for non-city residents at city golf courses and tennis courts.

* The Bureau of Street Maintenance was asked to analyze potential savings from biweekly street sweeping, rather than the typical weekly schedule.

It is unclear which, if any, of these proposals will be incorporated in Bradley’s budget.

“There comes a threshold under which it is impossible to go and still maintain public services,” said Anton Calleia, chief administrative assistant to the mayor.

Already the city has fallen $50 million short in the fiscal budget that ends June 30, as revenues fail to keep up with expenses, records show. Officials had to scramble last month, scrapping purchases of trucks and street sweepers and dipping into unused funds of various other capital projects to come up with the money to tide over the city, Comrie said.

Bradley is making his final decisions on how he proposes to balance expense cuts and new taxes to cover the projected deficit.

The tough choices for Bradley come as the mayor is under fire from the City Council over his urging Police Chief Daryl F. Gates to resign. Key council members, such as President John Ferraro, and Budget and Finance Committee members Zev Yaroslavsky and Picus said they have been kept in the dark as to how the mayor plans to resolve the budget crisis.

Also anxiously awaiting Bradley’s final plan are union officials who are fearful of layoffs and department heads who are bracing for cuts in their staffs.

What is clear to all of them is that none of the choices--more taxes or fewer expenditures--will be easy.

“I don’t see the council anxious to raise new revenue,” Ferraro said. “No elected official anywhere is anxious to raise taxes.”

At the same time, Picus said, “Certainly we don’t want to cut back (services). Police is the last thing I’d cut.”

Some of the city’s largest and most visible departments--police, fire, parks and recreation and libraries--could be in the most jeopardy because the patchwork of taxes, fees, grants and bonds that make up city revenues leaves them unprotected.

About one-third of all money raised by the city is restricted for special uses.

Building permit fees are used exclusively to support the Building and Safety Department. Sewer operations are funded by special taxes and bond sales that cannot be used for other purposes. The Transportation Department is funded by the Proposition A sales taxes that are restricted to transit projects. Even the Bureau of Street Lighting has its own funding source in special assessment districts.

“It doesn’t pay to save in transportation or sewers,” said one analyst who requested anonymity. Because their financial resources cannot be used to bail out other programs and departments, he argued, nothing is gained by cutting back those departments.

Others, such as the Department of Aging, have a combination of restricted funds and general funds.

Many of these departments are small. As one analyst said: “A brutal budget means police and fire (will be cut) because that’s where the money is.”

The Police Department accounts for about 25% of the city budget and the Fire Department about 10%. Sewer services, garbage collection and street sweeping take about 30% of city funds.

In his budget, the mayor’s goal is to slash 10% across the board from about $1.5 billion in programs supported by the general fund.

Any cuts would have to stand up to scrutiny by the City Council, which can amend the budget. Bradley then can veto changes, but council can override with a two-thirds vote.

The council members are protective of libraries, fire stations and police foot patrols in their districts--all services that are highly visible and important to constituents.

“Many of these proposals are just not possible politically,” said a council aide who spoke on condition of anonymity. “There’s no way (the council) will let a fire station be closed. No way.”

If the mayor and council cannot find $100 million to $150 million in cuts, they will need to find new revenues to cover the difference.

Some economists say that the city has pushed business taxes about as high as they can go.

“At times like these,” said Jack Kyser, chief economist of the Chamber of Commerce, “the city needs to be sensitive to the business base because that’s where the jobs come from.”

Other options, such as an admissions tax on ticket sales or a tax on services are considered “regressive,” in that they disproportionately affect the poor.

More likely, sources say, is a new garbage collection fee.

Bradley has suggested instituting such fees before and the city administrative officer also favors imposition of such a fee. With nearly 700,000 households, even a $5-a-month fee could generate $42 million a year. The city does not charge for garbage service.

“It’s time to dust off the garbage collection fee,” said one adviser to the mayor. “It’s the single biggest tax or fee opportunity left.”