Picus Urges Harsh Action on Budget

Los Angeles City Councilwoman Joy Picus proposed Wednesday that the city sell the international airport, the port operation and impose fees for a full range of city services, including firefighting, to bail the city out of its budget crisis.

As the extent of the budget problems became increasingly clear during a second day of council hearings, Picus said the time has come for solutions “on a different order of magnitude.”

Los Angeles is facing a projected $177-million budget deficit. Mayor Tom Bradley has proposed $100 million in spending cuts and $77 million in new taxes to close the gap in his $3.9-billion budget.

“For the past several years we’ve been stretching a rubber band of taxing and cutting spending,” Picus said after hearing city department heads complain that they cannot maintain vital services with the suggested budget cuts. “We need to do something more drastic and difficult than done before.”

Picus’ proposals got a cool reception from her fellow council members.

“All of these are worth exploring,” Councilman Marvin Braude said. “But all of them would take so long to implement that they would not be useful in the current budget.”

Councilman Zev Yaroslavsky, chairman of the Finance and Revenue Committee that is holding the budget hearings, said government should provide certain basic services: police, fire, paramedics and public works. “Senior citizens shouldn’t have to worry if they can pay for an ambulance before calling 911,” he said.

Still, Picus said the city must look at “market-based pricing” of virtually all city services. She said she will ask each department head to compile a list of possible fees for services.

Among the services for which she said the city could possibly charge fees are:

* Paramedic services.

* Firefighting.

* Some library services beyond basic book lending.

* Rubbish collection, based on weight of garbage.

“We need to look in these terms because that’s the future,” Picus said. “We have got to somehow readjust our thinking” if the city is to continue providing necessary public services.

She said the city conceivably could issue residents cards that could be exchanged for a fixed dollar value of services. “When it’s used up, they’d have to buy another,” she said.

Picus also suggested that the city could defer payments to employee pension funds to minimize a budget deficit.

Selling Los Angeles International Airport is an idea that has been around for several years and is currently being studied by the Department of Airports.

A study last year by the Reason Foundation, a conservative policy research group, estimated that LAX could be sold for $1.3 billion or more.

Interest could be earned on investment of the profits, further subsidizing city operations. At 10%, the proceeds from the sale of LAX could provide $130 million a year. At 5%, the investment could earn the city $65 million. The sale of LAX would also provide $13 million annually in new property taxes.

The harbor, one of the busiest port operations on the Pacific Rim, would also be a billion-dollar property, said Kevin Teasley, a spokesman for the Reason Foundation.

“I don’t see any reason why we need to own an airport. . . . I don’t see any reason why we need to own the harbor,” Picus said.

But Yaroslavsky said: “Every time we have a budget crisis are we going to run out and sell a major asset? After selling LAX what would we do for an encore?”

Picus made her proposal in response to complaints from City Atty. James K. Hahn that the proposed budget for his department could potentially cost the city millions of dollars from botched court cases. Under the proposed budget, the city attorney’s office would get a 6.8% budget increase, but would lose 58 positions in a hiring freeze.

“You’re making a big mistake here that could cost the city a lot of money,” said Hahn, who urged that other city departments absorb the cuts proposed for his department. “There’s a lot of things being done in this city that don’t need to be done and you know it,” said Hahn, suggesting that tree trimming is not as critical as legal representation.

When his argument was rejected by Finance and Revenue Committee members Picus, Yaroslavsky and Richard Alatorre, Hahn said that a rubbish collection fee would provide enough additional city income that his department could afford to hire more attorneys.

Just how the council will resolve the budget crisis by the June 1 deadline is unclear.

But Braude said: “Something will give. But we may not know what it is until the last minute.”