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County Votes Deep Budget Cuts if U.S., State Don’t Help : Spending: Supervisors adopt $11.5-billion plan. They warn that without aid, at least 4,800 workers will be laid off and health services drastically reduced starting Oct. 1.

TIMES STAFF WRITERS

After months of hand-wringing and weeks of delays, the Board of Supervisors stepped firmly into Los Angeles County’s fiscal quagmire on Tuesday and unanimously adopted a precarious $11.5-billion budget that calls for sweeping health care cuts, thousands of layoffs and holiday-season furloughs for those who remain--if Sacramento and Washington do not quickly come to the county’s rescue.

Balancing their troubled spending plan once again with money they do not have and may not get, the supervisors delayed the day of reckoning for the county’s vast network of health centers and clinics for another two months.

Using an array of creative financing techniques, the board found tens of millions of dollars to save a dozen libraries and many parks from closure and more than 100 prosecutors and other law enforcement officials from layoffs.

But if hundreds of millions of dollars in additional help from the state and federal governments is not obtained, the supervisors warned, they will have no choice but to implement the health care cuts they adopted in principle on Tuesday.

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By late Tuesday night, part of that financing scheme had already begun to unravel. Aides to Gov. Pete Wilson said he would veto a bailout plan approved by the Legislature last week that sought to give Los Angeles County the option of taking $75 million a year for the next five years from the Metropolitan Transportation Authority. The Wilson aides said the governor might consider approving a lesser amount.

If the money fails to materialize, a drastic downsizing of the county’s far-flung health care system will commence Oct. 1, costing at least 4,800 county workers their jobs and thousands of county residents access to health care. Under the plan adopted Tuesday, the county would shutter all six comprehensive health centers, close 29 of 39 medical clinics and severely curtail outpatient services at that six county hospitals that would remain open. Board of Supervisors Chairwoman Gloria Molina kicked off the budget session by saying that a desperate search for state and federal assistance had produced some significant results, but also “some profound disappointments.”

“The scope of our budget shortfall,” she said, “dwarfs the gains we have made in revenue. Horrific service cuts are unavoidable. Choosing between the lesser of two evils, while never easy, becomes unthinkable when even the lesser of the evils will cost lives.”

Supervisor Yvonne Brathwaite Burke agreed that even the lowest level of cuts put into action by the board on Tuesday will be painful. “This is a sad day for Los Angeles County,” she said. “It is a day of reckoning. I feel bad for those employees who will lose their jobs and those people who will not get services.”

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To guide the county through the worst of the crisis--the health care cuts--the supervisors named Burt Margolin, a respected former state lawmaker who is an expert in health care issues, to the powerful new post of health czar.

“Good luck, Mr. Margolin, you’re going to need it,” Molina said moments after the board unanimously endorsed his appointment.

Molina and her colleagues acknowledged that postponing the health care cuts was the political equivalent of playing chicken, with more serious consequences the later they wait.

“We are taking a prudent risk. And make no mistake about it, it is a risk,” said Supervisor Zev Yaroslavsky. “The assumption we made here is that we will get help from Washington and from Sacramento. If we don’t get that help, and in a few months, then the sword of Damocles drops.”

The supervisor’s unexpectedly swift action Tuesday came under pressure from Wall Street bond rating agencies, which are concerned that the board had not acted on the $1.2-billion budget deficit even though it is now a month into the new fiscal year.

In a whirlwind session, the supervisors agreed to:

* Call for a holiday furlough for four days between Christmas and New Year’s without pay for all employees, saving the county $28 million. The furlough, which is effectively a pay cut, must still be negotiated with the county’s labor unions. Gilbert Cedillo, general manager of the Service Employees International Union, Local 660, did not immediately reject the proposal. “We’d like to sit down and negotiate with them, see what they say,” he said.

* Agreed to take $144 million in excess earnings from the county employees pension fund and use the proceeds to restore some funding to a variety of departments, particularly the district attorney, public defender, parks and libraries. “We’re restoring money, but it’s only bits and pieces,” Molina said. “We’re still looking at half a billion dollars in cuts.”

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* Endorsed a new entertainment tax on tickets to Universal Studios and Magic Mountain and an increase in hotel taxes in unincorporated parts of the county. Those tax proposals must face public hearings before they can be enacted, but the supervisors went ahead and included the estimated $3.5 million in proceeds into their budget deliberations.

* Indicated that the planned layoff of more than 2,500 welfare and probation workers could be delayed if state legislation assisting both departments is enacted. A Superior Court judge on Tuesday refused to issue a preliminary injunction against the layoffs that was sought by the county’s biggest employee union.

* Over vehement protests from the MTA, a deeply divided board voted 3 to 0, with Molina and Burke abstaining, to formally divert $75 million in transit funds to the cash-starved county. With Wilson’s threatened veto of the measure, that money is in doubt.

The supervisors had earmarked the transit money for health services, where a huge deficit dwarfs all other aspects of the county’s budget problems.

The day’s budget deliberations were frenzied, with supervisors and their aides scribbling motions and amendments on pieces of scrap paper and bewildered county officials using a chalkboard on the dais to keep score of all the funding being restored to various departments.

When the supervisors adjourned, county officials had no idea of exactly what the spending plan, which had been about $11.1 billion, would ultimately cost.

Each supervisor sought to rein state funds for particular departments, but they had to stop several times to make sure their numbers were correct.

“This is amazing,” said one county official, shaking her head. “It’s like Christmas in August.”

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After weeks of often turbulent confrontations with union members and the public, the board passed its budget with relatively little opposition from audience members.

One of the few critics was Beth Osthimer of San Fernando Valley Neighborhood Legal Services, who said the cuts in health services will slash the safety net for millions of people, many of whom will suffer from an immediate cutoff of services.

Molina responded that no one will be denied immediate health care under the proposal to put off health center and clinic closures for two months. But she cautioned that when the cuts come, they will be dramatic.

“There will be longer lines, longer waits, more confusion and more difficult access,” Molina told Osthimer shortly before the board voted on the budget. “These cuts will be painful, they will be onerous. They are almost amoral.”

Margolin, who had chaired a the county’s Health Crisis Task Force, a blue-ribbon panel of independent experts created to recommend alternatives to the closure of County-USC Medical Center, reluctantly agreed to accept the new post as health czar despite the daunting challenge before him. “It will be an incredibly difficult assignment, but none of us has a choice,” Margolin told reporters. “We’ve got to save this system.”

The task force concluded that closure of County-USC, which stands as a monument of government’s commitment to provide health care for those who have no place else to go, would have devastating consequences.

As the supervisors plowed through a score of motions on the budget, much of the drama was taking place behind the scenes.

At one point late in the afternoon, Supervisor Deane Dana startled his colleagues by hinting he was thinking of withdrawing his support for the transfer of $75 million in MTA funds to the county in each of the next five years.

After a flurry of activity, however, a vote was taken, and Dana provided the critically needed third vote allowing the county to use the money if Wilson approved it.

Immediately, Antonovich was on the phone at his podium desk, talking to a relieved state Sen. Tom Hayden (D-Santa Monica), a prime supporter of the transit money shift. “We make a good team,” Antonovich, a conservative Republican, said to Hayden, one of the most liberal members of the Legislature. “Now we put [the money] into health.”

MTA Chairman Larry Zarian had pleaded with the supervisors not to raid the transportation funds to bail out the county. But his arguments fell on deaf ears.

Early Tuesday morning, the MTA board, led by Mayor Richard Riordan, met in emergency session to urge Wilson to veto the bill. The vote was 9 to 3, with three county supervisors who also serve on the MTA board as the dissenters.

Burke likened the Legislature’s approval of the diversion to putting “one glass of water between two people dying of thirst.” Burke, however, left the meeting before the vote.

Hayden, a critic of the Metro Rail subway project, who attended the MTA meeting, responded, “The MTA is not thirsty. The MTA is bloated.”

MTA officials warned that the diversion would shut down their multibillion-dollar rail building program for five years, including delaying extension of the subway to the city’s Eastside, the Westside and the San Fernando Valley and building of a Downtown-Pasadena trolley line. They contend that the loss would be far greater than $75 million a year--or $375 million over the five years--because the money is used to leverage hundreds of millions in debt.

Times staff writer Richard Simon contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Profile: Burt Margolin

Margolin was unanimously named to the new post of Los Angeles County health crisis manager. He is to guide the county through the budget crisis that threatens closure of most health centers and clinics.

* Born: 1951

* Residence: Los Angeles

* Education: UCLA, political science.

* Career highlights: Chairman of the county Health Crisis Task Force established in June to find alternatives to shutting down County-USC Medical Center. Formerly assemblyman representing parts of the Westside and San Fernando Valley. Legislative accomplishments include health insurance reform for small businesses and penalties for hospitals and doctors who refuse to provide emergency treatment for uninsured critically ill patients. Previously chief of staff to Rep. Henry A. Waxman (D-Los Angeles).

* Family: Married, two children.

* Quote: “The mission of the county is the protector of public health. It is literally at stake.”


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