County Budget Avoids Deep Cuts

In a dramatic departure from her bottom-line approach, outgoing Chief Administrative Officer Sally Reed on Monday unveiled a “compromise” $11.9-billion budget for Los Angeles County that avoids deep cuts in public safety and social programs by counting on one-time money she previously considered too risky.

After the Board of Supervisors rejected much of her tough fiscal medicine during last year’s contentious budget battles, Reed concluded that recommending hundreds of millions of dollars in new spending cuts for the coming year would be too devastating and is not realistic politically.

“I am doing some of what Sally Reed told them last year not to do,” Reed acknowledged in an interview before she released her last budget. Reed will join the Wilson administration in June as director of the Department of Motor Vehicles.

After preaching that the county must move away from reliance on one-time revenues to pay for ongoing programs, Reed relented and is counting on hoped-for federal funds, plus nearly $400 million from county pension funds and carry-over balances to avoid cuts in the fiscal year that starts July 1.

In short, her steady-as-you-go spending plan reflects a desire not to engage in political combat with her bosses. It cuts $220 million in spending from the current year’s adopted budget but maintains most basic services.

Unlike last year, when an unprecedented $1.2-billion deficit caused Reed to recommend cutting one of every five county jobs and closing County-USC Medical Center, the new budget proposes a minor reduction in positions and avoids sweeping cuts in the troubled health care system. It would, however, continue a freeze on employee pay raises.

Reed’s more politically palatable approach generally pleased county supervisors, who will adopt a final budget this summer.

Supervisor Zev Yaroslavsky expressed relief that the county is in a stronger financial position this year because of actions taken last summer and fall. He said what Reed offered is “largely a hold-the-line budget” that does not change much from current operations.

“There is no significant movement in her budget to further belt tightening,” Yaroslavsky said.

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Public safety would remain the county’s highest budget priority. But the Sheriff’s Department would not receive enough money to open the high-security Twin Towers jail downtown, which stands ready to receive inmates but cannot because of the county’s fiscal problems.

Sheriff Sherman Block called Reed’s proposal “the best budget we have seen in years” and expressed the hope that the new jail may actually open midway through the new fiscal year.

“It does not provide for anything new or replacing anything that has been lost, but there may be some dollars to open one of the Twin Towers,” he said. “That would be good news.” Block said opening one of the towers in January would make available 2,000 badly needed beds for inmates.

Reed said the only option for opening part of the ultramodern jail involves use of $18 million in taxes that are being kept in reserve because of a court decision which invalidated tax increases imposed without a vote of the people. Reed did not recommend providing the county’s overburdened criminal justice system with an infusion of new money to pay the costs of the state’s “three strikes” sentencing law, which is clogging the jails with felony defendants and the courts with criminal cases. The only addition was a scant $1.3 million to hire a small number of additional sheriff’s deputies.

A spokesman for Dist. Atty. Gil Garcetti said that his biggest concern is that the budget does not include about $4 million needed to bring his prosecutors’ salaries up to par with attorneys in the county counsel’s office. Garcetti wants money from assets seized in criminal cases to be used to raise the salaries of his 900 or so prosecutors. But Reed’s budget calls for the forfeiture funds to go for other purposes in his office.

Reed’s budget assumes that the county will not have to meet certain requirements to match state funding for welfare. If that isn’t true, the budget calls for imposing a three-month-a-year limit on general relief payments to the poorest of the poor, who are now eligible for grants for up to a year.

Rather than urging sweeping reductions in the county’s vast health system as she did last year, Reed reversed course and is counting on President Clinton to come through with more federal funds to avoid deeper downsizing of the hospital system. Reed said the county has no contingency plans and would be plunged into another health crisis like last summer’s if the additional federal assistance is not realized.

The county has promised the federal government that it will move the nation’s second-largest public health system away from its heavy reliance on expensive hospital treatment to less-costly outpatient care at community clinics.

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In line with those promises, Reed’s budget assumes the county will move ahead with the privatization of Rancho Los Amigos Medical Center in Downey. And she counts on private operators taking over 22 more community health clinics despite recent difficulties with that effort.

If the privatization proceeds, the Health Services Department would lose the vast majority of the 1,000 county positions that would be eliminated if Reed’s budget is adopted by the supervisors. The Probation and Internal Services departments also could see a loss of jobs.

Nevertheless, the county would remain the region’s biggest employer, providing nearly 80,600 jobs.

To hold the line on spending, Reed’s budget again contains no pay raises for county workers. She said the virtual freeze on most salaries in recent years has proved to be “one of the most successful cost-containment tools” used by the supervisors to address the county’s fiscal problems.

A spokesman for the county’s largest employee union said that Reed’s budget proposal is far better than last year’s, when she outraged union leaders and workers by calling for the elimination of county jobs.

But Dan Savage, a spokesman for the Service Employees International Union Local 660, said the union was troubled by the proposed elimination of 800 positions at Rancho Los Amigos and of several hundred other jobs. “We will as always fight any layoffs that we consider unnecessary or counterproductive to quality patient care,” Savage said.

Reed’s budget would eliminate a $516-million budget deficit largely by relying on $186 million in onetime money from the county’s pension funds generated by the stock market’s surge, and $202 million carried over from the current year, as well as another health system bailout from Washington.

Asked if she gave up on her strict regimen of fiscal medicine in advance of her departure to become head of the DMV, Reed said: “I don’t think it’s a capitulation. I think it would be a capitulation if I said I was only kidding last year.”

“There are options this year,” Reed said. “I didn’t see any options last year. In fact, the only option ended up being a special trip by the president and absolutely unique federal intervention” to save the health system.

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Reed said this year’s budget “is certainly more thoughtful, and in the end may have a better outcome.” She said her hands were tied in part by expanded state requirements that the county maintain a specific level of law enforcement, health and welfare services or risk the loss of state funds.

Absent from this budget are the proposals for widespread closures of parks and libraries that were contained in her spending plan last year. Instead, Reed is recommending that the county begin a two-year process of turning over four regional parks to cities in which they are located.

Candidates for the handoff include Apollo Regional Park in Lancaster, Arcadia Regional Park, Crescenta Valley Park in Glendale, El Cariso Park in Sylmar, Cerritos Regional Park, La Mirada Park, Jesse Owens Park in Los Angeles, Victoria Park in Carson, and the Tapia Natural Area in the Santa Monica Mountains.

The supervisors’ initial reactions to Reed’s budget were tempered compared to last year.

Yaroslavsky cautioned that the budget could convey the erroneous impression that the county is out of the financial woods, when it is not. “We have to restructure the health system radically,” he said. “We cannot go back to the way we’ve been doing business in previous years. The momentum for change could be slowed and that cannot be allowed to happen.”

Reed’s strongest detractor, Supervisor Gloria Molina, said the budget “presents some good [longer-term] goals.” But she said adopting a budget “isn’t just a dollars and cents balance. It is also a responsibility and moral duty to provide services.”

Already, the two Republican supervisors are appealing to Gov. Pete Wilson for more financial help for the state’s most populous county.

Board Chairman Mike Antonovich wrote Wilson that “even to achieve this survivalist budget will require your continued support and cooperation.”

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

A Spending Blueprint for L.A. County

The $11.9-billion Los Angeles County budget proposed Monday by Chief Administrative Officer Sally Reed is $220 million smaller than the current spending plan for the nation’s largest county government. The budget maintains most basic county law enforcement, health and welfare services and avoids deep cuts in programs by relying on nearly $400 million in one-time revenues.

THE HIGHLIGHTS

* Public Safety: The budget does not contain funding to open the new high-security Twin Towers jail in downtown Los Angeles. But one tower of the complex could be opened in January if the Legislature acts to overturn a recent court decision that invalidated local tax increases not approved by voters.

* Three Strikes: With the exception of a minor increase in the Sheriff’s Department, Reed is proposing no additions to the budgets of criminal justice agencies to pay for the costs of the state’s “three strikes” sentencing law. That could further delay civil court proceedings.

* Health: Significant reduction in services at Rancho Los Amigos Medical Center in Downey as part of the county’s effort to privatize the renowned rehabilitation center and 22 community health clinics.

* Looking to Washington: Budget assumes a further bailout from the Clinton administration to pay for restructuring the county’s health system from its emphasis on expensive hospital treatment to less costly primary and preventive care at community clinics. There are no contingency plans if the federal assistance is not provided.

* Job Losses: More than 1,000 positions would be eliminated, mostly in the health department, as a result of privatization, but precise figures on layoffs are not available. Some job losses are likely in the Probation and Internal Services departments.

* Pay Increases: Budget contains no pay raises for county workers.

* Revenues: Unlike last year, Reed’s budget relies on one-time monies, including $202 million in carry-over balances from the current budget and $186 million in excess earnings from the county’s pension fund because of a sharply higher stock market.

* Parks and Recreation: The budget proposes turning over four of the county’s community regional parks to cities where they are located and reducing county support for those parks by 50% in the next year.

* Libraries: No further reductions in operating hours.