Yaroslavsky Sounds County Budget Alarm : Finances: Supervisor is likely to play a key role in responding to looming $1.2-billion deficit. His comments, including mention of bankruptcy, have rankled some colleagues.

TIMES STAFF WRITERS

He is the swing vote, the budget-savvy outsider, the person most likely to play the pivotal role in charting the fiscal course of financially troubled Los Angeles County. And when he looks at the books, Los Angeles County's newest supervisor, Zev Yaroslavsky, does not like what he sees.

For years the budget-meister at Los Angeles City Hall, Yaroslavsky has been alarmed about the state of the county's finances ever since he was sworn in as a supervisor. Ironically, before that December day was over, Orange County had filed for bankruptcy.

Alone among the supervisors, he is not afraid to use the B-word--speaking openly about what he sees as the county's inevitable rendezvous with federal bankruptcy court.

"Just to do business as usual will bankrupt this county," Yaroslavsky said Thursday. "I know it. My colleagues know it. Wall Street knows it. The unions know it, and I think the public is getting wind of it for the first time.

"The notion that a county would become insolvent in California was so preposterous 6 1/2 months ago. Especially Orange County, the land of milk and honey in suburban California.

"If it could happen to them," he said, "it could happen to anybody."

The county is anxiously awaiting word from Wall Street on what rating will be assigned to $1.3 billion in borrowing necessary to pay the county's short-term bills. And with a $1.2-billion budget deficit looming in the fiscal year that begins in little more than two weeks, Yaroslavsky said the challenge facing the county is: "How do we avoid a major calamity for the people we serve?"

Such blunt talk has caused friction between Yaroslavsky and colleagues Yvonne Brathwaite Burke and Gloria Molina, his fellow Democrats on the board.

Molina on Thursday denounced Yaroslavsky for taking an "accountant's spreadsheet" approach to balancing the budget by slashing services. She has been pushing county officials to consider every option available to raise additional revenues, proposing measures ranging from a "tippler's tax" on every alcoholic drink sold in the county to aggressively going after drivers with outstanding traffic tickets.

Yaroslavsky, while not ruling out such measures, is most annoying to his new colleagues when he openly blames them for past failures to bring fiscal accountability to the Hall of Administration.

"The board majority has been reluctant to make tough decisions because the tough decisions would have adversely affected a lot of people," Yaroslavsky said.

He understands their position: "Part of me says I can't close a hospital. I can't close a clinic. Closing a hospital or closing a clinic is just a barbaric thing to do."

Unwilling to vote for such drastic measures, Yaroslavsky wants to make the county's problems heard in the state Capitol, and says county supervisors, legislative leaders and Gov. Pete Wilson are going to have to sit down together soon.

"You can't run for President of the United States and have the biggest county in the country teetering on the brink of fiscal demise," Yaroslavsky said, referring to Wilson. "The county has not just cried wolf in the past. It has a reputation for crying wolf, and then miracles happen. The miracles really haven't been miracles. They've been borrowing."

A lot is riding on this budget for Yaroslavsky as well. When sworn in, he vowed to overhaul the budget process, reorder the public health priorities and eliminate the partisanship that has long divided the board. He lamented that the county's "fiscal mismanagement has become painfully aware to everyone," and he urged his colleagues to "transcend ideology and outdated allegiances and come together to find solutions that work."

It remains to be seen how much success he will have in influencing a county budget whose most important number is always three--the number of votes it takes to approve the annual spending plan.

In years past, the three-vote majority has been brokered in some unusual alliances. One year, the stalemate was broken by a deal cut between liberal Molina and conservative Mike Antonovich.

Other years, it has been along strict ideological lines, liberals vs. conservatives. But last year, liberals Molina and Burke sided with conservatives Deane Dana and Antonovich over the objections of fellow liberal Ed Edelman.

"Anything's possible," said Don Knabe, chief deputy to Dana.

What the board liberals most fear is that Yaroslavsky will form an alliance with Republicans Dana and Antonovich. Yaroslavsky says it is too early to tell, but he has allied himself with Chief Administrative Officer Sally Reed's approach to balancing the budget by major cuts and restructuring instead of borrowing. Reed on Monday is to unveil a proposed budget balanced by sweeping cuts, the deepest of them in health services.

"The board members know there has to be a reduction in services and a restructuring," said one high-ranking county official. "But the board is not comfortable with what is being presented by the CAO. So the board will take it into its own hands. And they will wheel and deal to protect what is important to them; they will shop around for three votes."

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