Hopefuls grilled on budget deficit Debate focuses on budget crisis
The top five candidates for Los Angeles mayor faced an unusually tough grilling Thursday led by Austin Beutner, the former deputy mayor who once stood as a leading contender in the race.
While in past debates the candidates have offered a striking lack of specificity about how they would tackle the city’s looming $1-billion budget deficit, Beutner -- a retired investment banker who served as Mayor Antonio Villaraigosa’s first deputy until mid-2011 -- repeatedly pressed them for details at a lively San Fernando Valley forum.
“I didn’t hear an answer,” Beutner said after the debate at Cal State Northridge. “They’ve all said they don’t support a sales tax increase” -- a proposal that will go to voters in May. “Property tax is out of our control. I don’t think any of them want to increase utility fees. Some of them even say they want to do away with half-a-billion [dollars] that the city gets in revenue from businesses already.”
“But we’re in a crisis, as some of the candidates said, and it’s time for them to have a specific plan,” said the one-time mayoral candidate, who withdrew from the race last year.
For nearly two hours at the forum sponsored by the Los Angeles County Business Federation and the Daily News, Beutner drilled the mayoral candidates on topics such as the impact of police overtime cuts on solving crimes and how they planned to tackle traffic in the San Fernando Valley. But the central thread of the discussion was how the candidates could curb rising salary, benefit and pension costs that have threatened the city’s fiscal solvency.
None of the candidates outlined figures that could fill that hole.
City Councilwoman Jan Perry said she would ask city employees -- 70% of whom pay nothing toward their healthcare premiums -- to contribute more toward those benefits. But she said the primary focus should be bringing in new tax revenue through catalytic projects such as L.A. Live. Distancing herself from proposals outlined by City Councilman Eric Garcetti and City Controller Wendy Greuel, Perry said she would not support the repeal of the city’s business tax “unless we have a strategy that is grounded in reality on replacing the potential lost revenue.”
Greuel answered in vague terms, as challengers say she often does, about the importance of eliminating “waste, fraud and abuse,” spurring job creation, terminating the business tax, “and putting everything on the table in negotiations on pension reform [and] healthcare costs” with labor leaders. She noted that she is auditing two pension systems to determine if the city is getting the best return on its investment.
“The concepts are all fine, but let’s try to narrow it down, because I’m trying to figure out where it’s going to come from,” Beutner interjected.
“There’s no magic bullet,” Greuel said, after Beutner challenged her several times for specific numbers. “What it will take is someone who’s actually managed,” she said alluding to her experience in her family business and at City Hall.
Beutner, who got to know most of the candidates when he worked at City Hall, turned to Garcetti: “Eric, $1.4 billion -- I’m still looking for it.”
Garcetti highlighted the progress that the City Council has made in finding “hundreds of millions of dollars of savings” in salaries and pensions over the last few years. He said his plan for solving the deficit would include building business in Los Angeles and cutting healthcare costs by $50 million (with a goal of asking employees to contribute 10% toward their benefits).
Beutner cut Garcetti off, noting that he has argued against increasing the sales tax while advocating for eliminating the business tax -- which he noted could mean a loss of an additional $488 million in revenue: “So you’re talking now about a $2-billion hole,” Beutner said. “Where is that going to come from?”
“Not at all,” Garcetti replied. “When we reduce the business tax, we add more revenue in.” The former council president added that you “do it responsibly, with triggers, if the revenue isn’t coming in -- you don’t go further.”
“Let’s just stay with the math,” Beutner said after Garcetti began talking about his experience sweeping floors and selling ties in a small business.
Beutner soon moved on to Republican Kevin James, a political newcomer: “Kevin, still looking for $1.4 billion.” James spoke of improving the business climate, while rival Emanuel Pleitez argued for his “pension buyout” plan.
In an election that could turn on the participation of city workers and labor unions, some of the candidates were equally skittish on the question of whether they would try to renegotiate an upcoming 5.5% raise for some city employees.
For at least the fourth time, Greuel answered with her standard line that “everything has to be on the table.” “You have to go back to the table with those labor leaders -- I’ve spoken to them -- and we’re going to sit back at the table.”
Both Garcetti and James took the opening to challenge Greuel’s answers, as well as her claim to have found $160 million in savings through her audits.
“Look, I want unicorns, and I want rainbows, too, but you can’t budget on them,” Garcetti said.
James took Greuel to task for her table analogy: “There’s a lot on the table -- for her, that’s a very busy table.”
Several of the candidates showed reluctance Thursday to cut even in small areas. When Beutner noted, for example, that moving low-turnout city elections to the presidential cycle could save as much as $20 million, Garcetti said he would not favor that change because local elections could “get lost in the noise.”
Pleitez, a former technology executive, said he favored the move: “This is a no-brainer solution,” he said.
Greuel was asked to name the appropriate level of compensation for the L.A. mayor. While the median individual income in Los Angeles is about $24,000, Beutner said, City Council members are paid nearly $180,000 a year and the mayor makes $230,000.
“Do I have to pick a number?” the controller responded. Greuel said she favored capping the salaries of the City Council members and the mayor, which are pegged to compensation for judges, and that she would continue to take a pay cut equivalent to that of city employees.
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