Budget Calls for Tax Hikes, Layoffs : Finances: It is not known if the mayor will accept the package approved by the City Council. The plan seeks to prevent reductions in police and fire services.

Police and fire service in Los Angeles would be maintained roughly at current levels, but business and residential taxes would be increased and up to 70 city employees would be laid off under a budget package approved Thursday by the City Council.

The council’s actions came during a marathon special session to ward off continued attrition in the police and fire departments, as Mayor Tom Bradley had proposed two months ago when he announced that the city faced a $121-million midyear shortage of funds.

The mayor’s office declined to say whether Bradley will accept the package of layoffs and taxes, including cuts in his own staff, in order to prevent reductions in police and fire service.

Bradley’s October proposal had sought to avoid layoffs and new taxes, but would have reduced the Police Department through attrition to 7,671 officers from 7,800. It also would have allowed the Fire Department to shrink by 56 firefighters.

“This package distributes the burden evenly between the business and residential community,” said City Councilman Zev Yaroslavsky, who pushed the layoff and tax package. “Cutting police was not something that was palatable in this city at this time.”

The City Council accepted 5% across-the-board layoffs in administrative offices--including its own and those of the mayor and chief legislative analyst. But the council rejected Yaroslavsky’s proposal to also cut 84 city planners and building and safety inspectors.

The city’s financial woes have been caused by a combination of reduced tax receipts because of the recession and reductions in support from the state government, which had to close its own budget shortfall. The picture became bleaker in the last month when it was revealed that the city treasurer had overestimated revenue on investments by $25 million.

A number of one-time accounting measures and liquidation of property covered much of the shortfall, along with an anticipated $44-million transfer from the semi-independent Harbor Department. Bradley and the City Council also agreed to continue a freeze on hiring in most city departments.

Thursday’s debate centered on the final $30 million needed to close the budget gap.

But the prospect of raising taxes or laying off employees was received gingerly. Nearly half of the City Council faces reelection in four months, and three lawmakers are running for mayor.

After nearly eight hours of discussion, the council agreed to a compromise to balance increases on business taxes with an increase in residential taxes.

The business license tax will be increased 7 1/2%, an increase that will be maintained for two years--raising $18.7 million during the current fiscal year. Another $6.7 million will be raised by doubling the charge to residents to maintain garbage trucks from $36 to $72 a year for homeowners and from $24 to $48 a year for apartment and condominium dwellers.

The tax package won grudging approval from several business organizations that had protested any tax increase. But the business officials said they expect the city next year to consult with them earlier about the budget and to consider other fees including, for the first time, a rubbish collection tax.

The biggest winners of the day may have been the 84 planners and building and safety employees slated for layoff. Yaroslavsky said those departments should be cut back because of a slowdown in the building industry although the workers said they still have substantial workloads.

Other council members also complained that the cuts would fall disproportionately on women and minorities who hold the less senior positions slated for cuts. The planners were described as necessary to streamline and promote construction to help the city out of its recession. The proposed layoffs failed on a 8-6 vote.

The City Council voted to:

* Raise fees for Planning Department review of developers’ proposals. The measure is expected to recover the full cost of the service and raise $3 million.

* Increase greens fees at city-owned golf courses from $16.50 to $19.50, matching charges at county courses--a move that will raise about $1 million this fiscal year.

* Charge entertainment companies and sports franchises for traffic enforcement at their events. The measure has been fought by the Los Angeles Dodgers and vetoed once by Bradley.

Officials said to expect even worse when the city opens its 1992-93 fiscal budget deliberations next April. A shortfall of $150 million or more has been projected.