Billion-Dollar L.A. County Nightmare : Budget crisis requires new thinking and hard choices

Day after day, the news on the Los Angeles County budget front is grim. Having gotten through the last few fiscal years with one-time revenue gimmicks, deferrals and other such fixes, the county has virtually exhausted its budgetary tricks. So now, well before the current fiscal year ends on June 30, the Board of Supervisors has had to order yet another round of across-the-board departmental budget cuts. Despite such reductions, the county will face a shortfall estimated at $800 million to $1 billion for the 1995-96 fiscal year.

The budget crisis requires new thinking and new approaches--in short, inspired leadership and hard political choices by the supervisors. Board member Gloria Molina is introducing a motion today to “rightsize” Los Angeles County. Though vague in some respects, the motion nevertheless represents a provocative laundry list of ideas that is meant to provide a different way of looking at budgeting. It raises significant issues about the structure of county government and the wisdom of ordering indiscriminate, across-the-board budget cuts without taking into consideration the financial position of a department or the nature of services that a department provides.

The motion--which should be passed--is based on the premise that taxpayers should mainly be buying services, not paying for administration and other overhead. It is only prudent to squeeze as much as possible out of overhead in order to ease reductions in services. The Sheriff’s Department is releasing 3,000 inmates early from two jails that will be closed in order to cut its budget 1.5% (other departments had to make 3% cuts). Might these much criticized early releases have been mitigated if the sheriff and other county officials had worked more imaginatively and aggressively to rethink administrative costs?

To identify and analyze administrative costs across departments, Molina’s motion would order Chief Administrative Officer Sally Reed to assist departments in examining the ratio of administrative to service employees; to look for ways to discount charges of one county department to another for services; study the consolidation of departments to reduce costs; examine the $700 million per year that departments in total spend on “professional and specialized” services, and analyze the $4 million spent annually on travel as well as the $1.5 million that is laid out for memberships to organizations.

The saving that might result may sound like mere dimes in a budget of $14.5 billion, of which $2 billion comes from county taxes, but it might be enough to make a real dent in the reduction of services.

The easy part for supervisors is passing the motion and putting the burden on the CAO. But the supervisors, though they have cut their budgets along with other departments, ought to scrutinize their budgets anew under the Molina motion’s guidelines for further trims. In the past, Los Angeles County supervisors often have been accused of fiscal laxity. It’s time for the board members to set a new course--by passing Molina’s motion, working through the whole budget in search of disposable administrative expenditures and then, for symbolic if no other reason, squeezing any fat and waste from their own offices. The crisis is now.