Mayor Vetoes Bid to Take $48 Million From CRA to Ease L.A. Budget Gap

As the city’s nasty budget feud reaches its final stages, Mayor Tom Bradley on Friday vetoed a City Council proposal to divert more than $48 million from the Community Redevelopment Agency to help close a projected $183-million deficit.

The mayor rejected the council plan, instead approving a $25-million diversion from the agency to help balance the city’s $3.8-billion budget. To make up the difference, Bradley proposed buying more city vehicles on credit, and taking funds from the Department of Airports and a parking lot construction account.

The mayor and council agree that, regardless of where the money comes from, they should avoid the reductions in police, fire, library and recreation services that Bradley proposed last month.

The City Council is expected to conclude the monthlong budget wrangle next week, when it is scheduled to consider overriding the mayor’s veto. Council members, who approved their budget with eight votes, said it is unlikely that they will be able to muster the 10-vote, two-thirds majority required to override the mayor.

If they fail to override, the budget as modified by Bradley will go into effect for the fiscal year beginning July 1.

Even as the mayor and council argued over the final budget details, city Controller Rick Tuttle suggested that the city’s financial woes are far from over.

In a letter Friday to Bradley and council President John Ferraro, Tuttle wrote that tax estimates used to prepare the budget are overly optimistic because of rioting that ravaged large sections of the city. The controller said the budget debate had been too narrow in scope because only pre-riot revenue estimates were available.

Although the mayor and council have been haggling over whether it is best to use CRA or parking funds to close the deficit, Tuttle said both sources may be needed.

“We have a circumstance where both funding options will probably need to be pursued to meet future expenditures,” Tuttle wrote.

The controller proposed that all parking meter and redevelopment funds that had been on the bargaining table, but are not included in the final budget, be frozen as a reserve fund for shortfalls that arise because of the riots. He estimated that the two sources could create a $70-million reserve.

Councilman Zev Yaroslavsky, who led the fight to use CRA funds, said he will oppose diverting more parking revenue. “We cannot continue to use trust funds like this, money available only one time, as a crutch,” he said. “It is deficit spending.”

Likewise, CRA officials said they oppose taking more money from their budget.

In his veto message, Bradley attacked attempts to take more money from the redevelopment agency. “At a time when we are searching for a means to repair the devastation caused by the riots,” he said, “I cannot comprehend the council’s $48-million raid on the treasury of the Community Redevelopment Agency.”

The mayor later said the agency has provided substantial low-income housing, child-care and social programs for the city--the kind of programs he said are needed in the wake of the riots. But a narrow majority of the City Council, led by Yaroslavsky, has depicted the CRA as a cash cow for wealthy developers, saying it has done little for social programs.

Yaroslavsky on Friday said he doubted that he can raise the 10 votes needed to override the veto. But he said the budget is still a “victory” for the city because, for the first time, it taps funds from the politically powerful redevelopment agency to cover city expenses.

When Bradley released his budget proposal nearly a month ago, it quickly came under fire for proposing a continued hiring freeze in all city departments. Police and Fire officials said a freeze would drastically reduce their forces and lead to increases in emergency response time.

The City Council responded with a budget proposal that tapped the CRA and other revenue sources to help maintain close to current staffing levels in both departments. The council also reversed many of the mayor’s proposed reductions in library and recreation services.

Bradley later agreed to restore all those programs, but haggling continues over how to pay for them.