City Faces Worst Budget Crisis Yet, Officials Warn

Predicting that government in the city of Los Angeles will soon face an unprecedented fiscal crisis, officials began budget discussions Thursday that could lead to higher taxes, continued reductions in police and fire services, and pay cuts for 23,000 city workers.

The ongoing recession and diminished funding from the state government could cut the city’s $2.2-billion general treasury by as much as one-fourth, City Administrative Officer Keith Comrie told the City Council’s ad hoc committee on the budget crisis.

The gloomy figures had officials reaching new heights in hyperbole--one said the city could become an economic “albatross that strangles” the state--and claiming that all manner of service cuts and taxes will be on the table.

The City Hall hearing, attended by almost 100 city administrators, was convened two months ahead of schedule. The committee, headed by Councilman Zev Yaroslavsky, discussed a litany of possibilities:

* Eliminating city programs, including the board that oversees the Department of Public Works and offices that regulate charities and provide endowments for the arts. Total savings: $11 million.

* Closing redevelopment projects, including those on Bunker Hill and in the downtown Central Business District, to allow property taxes to return to the city’s general fund. Savings: $30 million.

* Consolidating certain departments with the county for $3 million in annual savings. * Reducing employee salaries. A 5% across-the-board cut would save $75 million.

* Continuing a city hiring freeze that has pared the work force by nearly 2,500 over three years, including cuts of 517 police officers and 43 firefighters.

* Laying off workers in certain departments. Yaroslavsky last year called for cuts in planners and in building and safety inspectors, saying fewer of those workers are needed because of the slump in the building industry.

* Raising fees for trash collection and levying new taxes on cable television and tickets to movies, sports events and concerts.

The city now collects $6 a month from property owners to offset the costs of trash trucks but could raise another $130 million a year if it charged the full cost of trash collection--about $22 per month per household.

The cable television and entertainment taxes could raise $40 million a year. But such fees were defeated in the past.