Los Angeles City Hall budget fight escalates

The push by Los Angeles’ elected officials to address a growing financial crisis hit a new stage on Friday: open battle.

Just as credit rating agencies want them to work in unison on erasing a $212-million budget shortfall, Mayor Antonio Villaraigosa and members of the City Council traded threats and accusations on city spending and political leadership.

Villaraigosa started the day by promising to veto plans by the council to spend money from its discretionary accounts. The council ignored that warning, allocating $389,000 for a new park in the San Fernando Valley and $95,000 for sidewalk repairs in South Los Angeles.

After the votes, council President Eric Garcetti defended both projects and said city lawyers concluded that the mayor has no power to veto such expenditures. “It just seems like a case of bad research and bad knowledge by the mayor,” Garcetti said.

Villaraigosa’s budget aide, Deputy Chief of Staff Matt Szabo, sat in the audience and, as those votes were cast, signaled that as many as three expenditures could become the subject of a veto.

Villaraigosa spokeswoman Sarah Hamilton said in an e-mail to The Times that the council actions were rewritten in a way that left the mayor with nothing to sign or veto. The mayor is “disappointed that the council continues to spend money the city does not have,” she wrote.

The exchange reflected the deteriorating relations between a council and a mayor who have mostly avoided criticizing each other publicly. Villaraigosa said he is acting in the best interests of the city. Council members, including some who have traditionally been the mayor’s allies, have begun asking whether he is trying to shift blame for the crisis away from himself and toward them.

The tensions came as little surprise to Councilman Richard Alarcon, who said ambitious politicians at City Hall are sweating over the notion that the crisis will reflect badly on them.

“Political careers are at stake,” he said. “And leaders who are trying to make the best possible decisions know that their political futures are in jeopardy.”

Over the last week, the mayor has adopted a much more aggressive tone on the budget crisis, calling on the council to move more quickly on a plan to eliminate 1,000 jobs.

On Thursday, he disclosed that he is also preparing for a second, possibly larger, round of reductions -- as many as 2,000 additional positions -- that would reduce services at libraries, parks and other services paid for by the city’s strained general fund.

Alarcon said he would push for a halt to Villaraigosa’s police hiring plan -- a fundamental goal of his administration -- if the mayor seeks 3,000 job cuts. Councilman Ed Reyes said he wasn’t prepared to reduce the number of police officers but questioned Villaraigosa’s newly outspoken ways.

“I think he’s trying to assume a leadership role, one that was needed two to three years ago,” Reyes said.

Villaraigosa focused on 1,000 job reductions when he spent an hour appearing before the council Tuesday. Some members said they were then blindsided by the considerably higher estimate given by the mayor Thursday at a luncheon with business leaders.

Villaraigosa aides said the mayor did not bring up the larger number because he was discussing the city’s current shortfall, not the $484-million gap expected in the fiscal year starting July 1.

“Until this year’s budget is balanced, we will not know how many layoffs are necessary next fiscal year, but as the mayor said, there will be layoffs,” Hamilton wrote.

The mayor upped the ante Friday with his veto letter, which called on the council to turn over as much as $40 million from “council controlled” accounts to the reserve fund. The reserve will be dramatically reduced later this year to help the city close its budget gap.

Councilwoman Jan Perry called the mayor’s veto threat “a lot of heat and noise” and suggested his time would be better spent working constructively with the council on the shortfall.

Garcetti said his colleagues began reviewing their discretionary funds weeks ago and are working out a plan to send at least $12 million into the reserve in two weeks.

He said the city’s budget analysts do not know yet how much is available for the reserve and how much is legally required to go toward other initiatives.

Garcetti also questioned whether Villaraigosa would pare back or eliminate his own discretionary spending, such as his performance management unit and his office of international trade.

Szabo said he did not see such expenditures as comparable to the council’s discretionary funds.