Bradley Blasts Legislation Allowing Port Cities to Tap Harbor Revenue

After years of fending off raids on their treasury, Los Angeles port officials Wednesday scrambled to assess the impact of a state budget compromise that will allow the city to cushion its latest financial crisis by tapping up to $44 million in port revenues.

The Legislature’s action, which won final passage at 1 a.m. Wednesday, would also allow the cities of Long Beach, San Diego, Oakland and San Francisco to use reserve funds from their ports for such vital services as police and fire protection. In Long Beach, the city will be empowered to collect as much as $9 million in port revenues to balance its budget.

The two-year funding option sparked furious debate Wednesday in Los Angeles, which is expected to lose $48.3 million in property tax revenues, $4.8 million in cigarette taxes and $20 million in redevelopment funds as a result of the state budget compromise.

Indeed, even as some Los Angeles officials viewed the Legislature’s action as a political godsend, Mayor Tom Bradley blasted it as “chicanery” and “unprincipled” because it forces a city agency to compensate for what the state has taken away.

The bill, which some Los Angeles city lobbyists helped draft, evolved during California’s protracted budget debate and was tucked into a local government financing measure needed to balance the state budget. It was sent to the governor and late Wednesday was still awaiting his signature.

Weeks ago, state legislators were eyeing the estimated $90 million in funds from the five ports for California’s budget. But that move was abandoned when officials, led by lobbyists for Long Beach and Los Angeles, argued that the scheme was a power grab that would affect the ability of ports to finance long-term expansion projects.

As the budget debate raged on, however, the prospects of significant cuts to funding for cities made the notion of allowing them access to port reserves more and more politically appealing--at least to some municipal lawmakers.

Los Angeles City Controller Rick Tuttle, for example, spent much of his time in the Capitol trying to limit the damage to the city treasury. With the city facing large cuts in state revenues, Tuttle and others argued that the port funds were needed as an option to avoid potentially devastating cuts in service and/or new city fees and taxes.

But during the Assembly floor debate, Assemblyman Gerald N. Felando (R-San Pedro) questioned the wisdom of the proposal because “the city of Los Angeles is still able to steal $40 million from the port of Los Angeles.”

Felando, his voice rising, declared that the port needs the funds to embark on expansion projects that would attract new jobs to the harbor.

Similar objections were raised Wednesday by some Los Angeles officials.

Mayor Bradley vowed to fight any transfer of funds from the port, which for years has withstood City Council overtures toward its reserves. “The Port of Los Angeles creates 350,000 jobs and now they are going to be hit somewhere in the range of $44 million,” Bradley angrily told reporters at City Hall.

“I strongly resent it,” Bradley said, claiming that “in time, the public is going to see the chicanery, the trickery and this unprincipled attack” on the port.

For his part, the port’s executive director, Ezunial Burts, warned that shifting Harbor Department reserves to the city could have profound consequences for the port’s future.

“I don’t anticipate our operating side would be affected. There would not be layoffs or closure of facilities or anything like that,” Burts said.

But he said that allowing the transfer of funds would set a precedent that would jeopardize the port’s ability to commit to long-term development and projects seen as vital to the economy of the port and the region. At present, the port is attempting to win Coastal Commission approval of a $2-billion expansion project designed to keep it competitive during the next 30 years.

“I can only say that when you have a healthy industry like ours that produces jobs, you don’t go out and kill that. You do what you can to preserve it,” Burts said.

But others in the city insisted that Los Angeles’ potential budget crisis would be softened by the availability of funds from a port that, by all accounts, is financially in the pink.

“Is the mayor more interested in protecting the harbor and its surplus or in having police on the streets, and firemen and other city services,” City Council President John Ferraro said. “Where are you going to cut $40 (million) or $50 million? You can’t keep taking it from libraries . . . and parks.”

The bill’s Sacramento supporters used similar arguments to win its passage by a 59-12 vote in the Assembly and a 33-5 vote in the Senate.

“What we have empowered cities like Los Angeles to do is tap into surplus port funds if it is necessary for them to maintain police, fire and paramedic services,” said Assemblyman Richard Katz (D-Panorama City).

“It makes sense if you believe in local control . . . to give the city of Los Angeles . . . the local option to do what they need to do to protect the port as well as the city,” said Katz, who is weighing whether to enter next year’s Los Angeles mayoral race.

The debate among Los Angeles city officials is certain to rage on, particularly with Bradley and Council President Ferraro on opposite sides of the issue.

Said one city official: “The budget is like baseball. The mayor pitches and the council hits. And right now, Ferraro is walking up to the plate.”