The County’s Budget: A Shell Game

Los Angeles County’s budget practices are like the shell game played by quick-handed entrepreneurs in the poor neighborhood around MacArthur Park.

The street shell-game artist moves three cups around a portable table top, and the impoverished sucker tries to win the bet by guessing which one covers a small object. As is the case in such enterprises, the sucker usually loses.

In the county version, top bureaucrats shift money around so fast that nobody can keep track of where it’s going. That explains why--when patients wait eight hours to be examined in overloaded county hospitals--the gang in the County Hall of Administration has been able to find money for expensive office remodelings and fat executive bonuses.

The game begins in the summer when the five supervisors approve a budget, currently amounting to $12 billion.

When I first saw the supervisors’ deliberations, I had the feeling I had traveled back in time to 1940.

A chalkboard is wheeled into the supervisors’ meeting room, with the total budget figure on it.

That’s right--a chalkboard in this computer age when people go to Harvard, USC and other universities to study sophisticated ways of managing government finances. The only concession to modernity is that the chalkboard is green instead of black.

There’s a reason for this pre-World War II information system. The supes don’t want to know much about the budget, and never have. They delegate most of this work to County Administrative Officer Richard Dixon. The responsibility makes him one of the most powerful government officials in California.

“We trust him to thoroughly go over every department budget so that when it is presented to us, there is no fat in it,” Supervisor Kenny Hahn recently told Times reporter Richard Simon.

Dixon also likes to delegate. He gives each department head an appropriation after first hearing their request and trimming it to fit in with the overall county fiscal picture.

Then, he urges them to spend less than the appropriation. If there is a surplus at the end of the year, the department can use it for such goodies as remodeling.

A department head’s penny-pinching skills are also a major factor when Dixon and the supes decide whether to give them raises or--before the controversial program was recently halted--special bonus payments.

In other words, for a county department head, the rule is save a buck and make a buck. The health department boss is rewarded for spending less on county hospitals and clinics than the budget allocates for medical services for the needy. The welfare and mental health chief also look good with the boss if they save, rather than spend.

“The system creates a need to deny services,” one county veteran told me. “Rob from the poor to pay for the rich.”

Such savings financed Dixon’s now infamous $3.4-million remodeling that turned the county offices he and his staff occupy into something resembling the headquarters of a Beverly Hills savings and loan.

Dixon said that he saved $25 million over four years by reducing his staff from 682 to 440. Of course, this meant there were many fewer people available to monitor county spending, which is one of Dixon’s main duties.

The rest of the $25 million, Dixon said, was “allocated to the county programs.”

Dixon didn’t specify the programs, but veteran county fiscal officers cynically figured it went “down the black hole,” to be squirreled away for use by the supervisors for politically popular projects without public debate.

No matter how much the county whines about money, the supes always manage to come up with a few extra bucks for emergencies, thanks to such fiscal practices.

By the way, there’s no accounting of these surplus funds, no way to tell whether they are well spent or wasted. They just disappear into the black hole.

I’m told that if somebody could actually follow the money into the mysterious abyss, they’d find a network of special funds and accounts so complex, so devious that a mere reporter trying to track the money would soon be lost.

Money is shifted around, expenditures hidden, all the transactions protected from scrutiny because there is no accounting of spending at the end of the year.

Supervisor Gloria Molina, the newcomer, is pressing her colleagues to open the process to public scrutiny. But so far, they’re not interested.

Why should they be? They’re winners in the county fiscal shell game. Everyone else, including taxpayers, lose. Ironically, the biggest losers are the same people who lose at the street shell games across from MacArthur Park--the poor, who depend on county services.