Planners Urge L.A. to Ease Curbs on Business : Economy: Panel studying general plan says new jobs are essential to avoid municipal financial problems.

Los Angeles will face ever larger municipal financial problems over the next two decades unless thousands of jobs are created to keep pace with a steady increase in population, a panel of economists and urban planners concluded Thursday.

Speaking to the Los Angeles City Planning Commission, the panel also agreed that city budgets could be in danger of running deficits of $125 million to $182 million a year if the city’s industries continue moving to suburban cities and other states.

But the panel suggested that Los Angeles could stem the flow of jobs and reverse the sour economic projections by making the city an easier place for businesses to operate, by invigorating flagging commercial districts and by encouraging emerging industries as well as protecting existing ones.

“It’s not going to happen in a business-as-usual format,” city planner Bob Mullens said.

Los Angeles is predicted to grow by about 820,000 residents to 4.3 million before 2010, but the city’s current practices regulating construction and land use would provide few new places for them to live and work, according to projections in a new general plan for the city.

The general plan serves as the land-use constitution for the city by establishing the broad policies under which neighborhoods develop over many years. Los Angeles is in the process of rewriting its general plan, last updated in 1974.

On Thursday, city planning officials working on the project convened the panel to discuss how it would affect the long-term job outlook for the city. Senior Planner Emily Gabel told commissioners that total employment was projected to grow by 10% over the next two decades while housing construction was expected to grow 20%--throwing the so-called job-housing balance out of line. Many of the residents in newly constructed houses or apartments might find jobs only outside the city, in more business-friendly suburbs, the panelists warned.

The ratio between jobs and housing is a critical issue for city governments trying to balance their books. Although houses and condominiums generate property taxes, they are widely viewed by city financial administrators as money losers because the people who move into them require costly services such as police and fire protection over many years.

Job-rich businesses, on the other hand, generate more revenue for cities through taxes and fees than they consume in services. The excess is used to offset the costs of residential services.

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To prevent the development of such an imbalance, the general plan seeks to create 400,000 jobs over the next 20 years to stave off city budget deficits.

Tom Lieser, an economist with the UCLA Business Forecast, said it may be several more years before the region regains jobs lost in the recent economic downturn, which severely reduced employment in industries such as aerospace.

“It will be 1999 before we get back to where we were in 1990,” Lieser said. “Net job creation will not occur until after the turn of the century.”

Despite Los Angeles’ poor reputation in many business circles and the national media, studies show that industries such as entertainment, biomedical research and mechanical engineering remain strong.

To keep those industries strong and attract new ones, the general plan calls for infrastructure such as streets, rail lines and sewer pipes to be improved so they can compete with newer facilities in suburbs.

The City Council is expected to review the plan later this year.