Like It or Not, L.A. Budget Must Rest on Tough Choices : Riordan offers common-sense plan for a maturing economy

Tough choices. That’s how Los Angeles Mayor Richard Riordan describes his new 1996-97 budget. The City Council, like it or not, will have to make similar tough choices because the City of Angels is a maturing municipality, past its bloom of easy growth. City revenues are not expected to grow as fast as the economy, or to be adequate to cover expenditures.

As a result of this structural imbalance, Los Angeles faces a $240-million budget deficit next year and additional increments of more than $100 million annually until the year 2001, even if the economy marks up robust growth. So Riordan and his top officials have to make those hard choices in spending priorities, and in managing city government to lift it to a higher level of efficiency and productivity.

To balance the new budget, the mayor is relying on some controversial moves--cutting jobs, tapping harbor and airport funds and presenting non-tax revenue proposals.

The $4-billion spending plan puts priority on improving the quality of life in the city, Riordan insists. He is proposing increased expenditures for the Police and Fire departments and neighborhood services such as new and expanded libraries, tree trimming, cleaner streets and traffic safety.

All of us, obviously, would like to have a greater sense of safety and well-being. But Riordan says that to beef up neighborhood services without increasing taxes, city officials will have to “rightsize” the government by streamlining many services and eliminating what the budget calls nonessential ones. His cost-saving initiatives include the elimination of 1,070 jobs, 740 of which are already vacant. The cutbacks would fall hardest on city building and safety and engineering services. Displaced employees would be offered jobs in other departments or separation incentive packages. But the city’s overall payroll would go up with the planned hiring of 1,200 more police officers.

The mayor emphasizes he does not favor privatizing city services to reduce the payroll. “I am not an ideologue on privatization. I’m an ideologue on efficiency,” he said in laying out his plan to reporters.

He wants city workers to do their jobs in a way that will provide more services for the same dollar. Take tree trimming: Riordan says the city was doing elaborate, “Rolls-Royce” cuttings on city trees, so fewer were being groomed. More trees can be trimmed for the same money by a change in the cutting technique. Trees will get scaled back to “Chevy” cuts, which are better for the health of the trees anyway, he explains.

The City Council--more liberal than the mayor--is likely to make the budget process an ideological fight. But the city’s situation is not an ideological one; it’s a question of balancing resources and needs. The realities demand a different government approach. That is not to say the mayor has all the answers. But he does understand the fiscal dilemma. Is it understood also by the City Council, which under the city charter has the final say on the annual spending plan devised by a mayor?

The revenue picture is improving but it is problematic. For example, property tax receipts, the city’s largest revenue source, accounting for about one-fifth of general fund revenues, have declined dramatically since 1992-93 because of a variety of factors including the Northridge earthquake damage, a depressed real estate market and the state’s decision to permanently transfer to local school districts $130 million in property taxes that normally would have gone to the city. In 1995-96, the total assessed valuation for Los Angeles dropped 4.3%.

Clearly, Los Angeles has a maturing economy. There are no expectations of any monumental increases in tax receipts such as a young, exploding city provides. Revenue growth will increasingly depend on mundane transactions such as higher court fines and parking fees. More revenues from the airport and harbor may help. But the solution in the near term is like that of most families: Spend less, make a buck where you can.

Some City Council members are accusing the mayor of playing to voters. Well, he is. The budget carries a common-sense message, one the council members should not dismiss as mere rhetoric. The council members’ duty now is to work with the mayor, compromising as necessary, to build a better, safer environment for the people of Los Angeles.

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Revenue Gap

Mayor Richard Riodan’s 1996-97 budget illustrates a projected gap between revenues and expenditures.

Source: City of Los Angeles