Council Narrowly Approves Budget : Finances: Lawmakers are still divided on tax proposal needed to balance the plan. Document is sent on to the mayor’s office.

The Los Angeles City Council on Wednesday narrowly approved a record $3.9-billion budget, even as council members acknowledged that they remain deadlocked on a controversial tax proposal necessary to balance the fiscal plan.

The spending measure, which failed to gain the necessary eight votes for passage Tuesday, was approved by the bare minimum when Councilman Robert Farrell changed his position and voted in favor of the plan.

Farrell said he changed his vote so that the council could meet its obligations under the City Charter and deliver a budget to the mayor by Saturday.

“This just allowed us to do it on time,” said Farrell, who had unsuccessfully advocated adoption of a 1% city income tax that would have raised $200 million.

Though the vote was close, passage had been assured. Councilman Hal Bernson said he was prepared to cast the deciding vote in favor of the budget if necessary to fulfill the council’s responsibilities.

Bernson ultimately voted against the measure and was joined by Ernani Bernardi and Nate Holden. Council members Joel Wachs and Joan Milke Flores were absent.

Council members remained divided on a real estate transfer tax that would raise $52.7 million that is needed to balance the budget.

The tax proposal will come before the council Friday and already five members have said they will vote against it. One additional no vote, or abstention, would kill the tax.

Without the revenue, the council would be forced to make major revisions to its spending plan, or leave it to Mayor Tom Bradley to cut the budget. Bradley has five working days to veto items in the budget, and the council then has five days to attempt overrides.

The budget document was delivered to Bradley’s desk Wednesday afternoon. Bradley press secretary Bill Chandler said the mayor will wait until the council takes up the transfer fee on Friday before making any decisions on the budget.

The tax vote, Chandler said, “could have a significant impact” on city operations. Already the mayor and council have cut more than $100 million in spending requests largely through deferral of capital projects and vehicle purchases and a hiring freeze that is expected to eliminate 1,800 positions over the next year through attrition.

The city administrative officer reported to the council this week that if the tax is not approved, critical city services would also have to be cut.

According to the CAO, the city would have to lay off 500 workers on July 1, eliminate 360 police officer positions through attrition and reduce library hours by eight hours per week and park facility hours by 12 to 14 hours per week.

Council Finance and Revenue Committee Chairman Zev Yaroslavsky, who had doubts the transfer tax would be approved, said he now is confident of its passage.

“Today we enacted the expenditure side,” Yaroslavsky said. “It would be an act of foolishness not to enact the revenue side.”

But Lynn Wessell, a lobbyist leading the coalition of real estate, small business and homeowner groups opposing the tax, said he is “cautiously optimistic” that the measure can be defeated Friday when he plans to pack the chamber with opponents to the plan.