A budget body blow

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Rhetoric about shared sacrifice often has an ennobling resonance. Its reality can be excruciatingly painful, as Los Angeles residents will discover when they begin to sort through the implications of the austerity budget Gov. Jerry Brown will deliver Monday.

In fact, when it comes to the city and county of Los Angeles, the new state budget will deliver not the “pain” Brown keeps reminding us is inevitable, but torment.

Take, for example, just three of the proposals local officials confirm they expect to see in Brown’s first budget: drastic cuts to Medi-Cal and the CalWORKS welfare-to-work program, and the diversion of so-called low-level offenders from the state prison system to local jails.


County Chief Executive William T. Fujioka told me this week that his office has been in talks with Sacramento for a couple of weeks on how to handle the staggering additional costs Los Angeles will be forced to assume. “They’re just pushing these problems down to the local level with no real thought about the consequences, and I find that amazing,” said Fujioka, who, at 60 and a veteran of both city and county politics, is no stranger to bitter budget warfare.

Brown’s budget, he said, also will propose that parole violators as well as newly convicted felons be sent to local county jails rather than state prisons, even though Los Angeles County’s antiquated jails already are as overcrowded as the prisons. Even so, Fujioka said, Sacramento is offering just 40 cents for every additional dollar the county will have to spend.

“We need to be thinking about replacing our jails,” Fujioka pointed out. “They’re not just overcrowded; they’re too old, which means they’re expensive and labor-intensive to run. Last year, Sheriff [ Lee] Baca had to take $128 million in budget cuts, and staffing the jails forced him to reduce other services. If this budget is adopted, there will be a domino effect with an inevitable impact on public safety.”

According to Fujioka, the pain won’t stop there. Slashing the Medi-Cal and CalWORKS programs will push a greater number of families into the emergency rooms of county hospitals already overburdened by the economic downturn. Cutting the welfare-to-work funds, he said, “will push more people onto general relief, and we’ve already seen the numbers there grow dramatically. It’s the most basic level of support we provide to people most in need, and every dollar we spend on it comes right out of our general fund, which means that money isn’t available for all the other county programs.”

Even so, the consequences for the city will be, if anything, even greater. Officials anticipate that Brown will propose the elimination of community redevelopment districts and enterprise zones, which Jeff Carr, Mayor Antonio Villaraigosa’s chief of staff, said “will be a major hit to Los Angeles.”

Los Angeles has 32 community redevelopment districts, and they’ve been responsible for the revitalization of South Park, downtown’s historic core and Hollywood and North Hollywood, among other areas. Last year, according to Christine Essel, the former Paramount Studios executive who now is chief executive of L.A.’s Community Redevelopment Agency, those 32 districts pumped $178 million in direct investment into the city’s economy. Although $100 million of that went to encouraging job-creating businesses, $50 million paid for more affordable housing across the city. Moreover, according to Essel, because every dollar spent by the CRA generates an additional $5 to $6 in private investment and payrolls, abolition of the CRA would take at least $890 million out of the city’s economy in the new state budget’s first year.


That’s a body blow in good times, let alone these dreadful ones.

When Jerry Brown’s father, Pat, was governor, California spent 20% of its annual budget on capital projects — schools, roads, water — that expanded opportunity and prosperity for everyone. Today, capital expenditures make up barely 5% of the budget. Worse, as Essel points out, apart from the now-threatened redevelopment agencies, “the state just doesn’t have any other tool to directly stimulate the economy. If we don’t create taxpaying businesses and create jobs, how are we going to balance budgets at any level, state or city?”

Both Essel and Fujioka, like other local officials with whom I spoke this week, believe that the brutal cuts Brown is proposing are meant to set up the anticipated spring election in which the governor will go to the people and ask them to approve the extension of existing tax surcharges. Playing chicken with voters whose own finances are, in many cases, stretched to the breaking point could be a dangerous proposition.