Former Villaraigosa aide says budget shortfall overstated


One of Los Angeles Mayor Antonio Villaraigosa’s former high-level budget advisors says that city officials are using “fuzzy math” to overstate the size of the projected budget shortfall, even as they press voters for passage of a sales-tax hike in the March 5 election.

Matt Szabo, who served until last summer as Villaraigosa’s No. 2 policy aide, said a new financial report indicates the budget shortfall for the upcoming fiscal year is less than half the $216-million figure that has been used repeatedly by officials in recent months.

Miguel Santana, the city’s top budget official, has warned that a defeat of Proposition A could lead to cuts in park hours, closure of swimming pools and the loss of 500 police officers. But Szabo said numbers in Santana’s own report, issued Thursday, stated that pension costs are $45 million lower than expected and said an additional $70 million could be available to cut the shortfall even further.


“If we’re making an argument that failure to pass a tax increase will result in drastic cuts, then the numbers the city uses had better be accurate. And I don’t think they are,” said Szabo, who handled budget matters for Villaraigosa. “The question people need to ask is, is [the shortfall] being overstated for the purpose of passing the sales tax?”

Szabo, one of 12 people running to replace City Councilman Eric Garcetti, who’s running for mayor, made his statements days after the Proposition A campaign announced that Villaraigosa has endorsed the tax. Asked about Szabo’s statements at a news conference promoting the tax hike, Villaraigosa accused The Times of “trying to create a controversy.”

“I’ll tell you this. I stand behind these numbers,” said Villaraigosa, appearing with Police Chief Charlie Beck near a display identifying the shortfall as $216 million.

Santana said he kept his projection at $216 million for now because he does not yet know how much expenses will rise in the coming fiscal year, which starts July 1. The cost of the LAPD’s pursuit of accused killer Christopher Dorner or new reductions in federal funding could easily add to next year’s budget woes, he said.

Even with the additional money cited by Szabo, the city will still have a gap this year and in the future, Santana said. “Life without the sales tax means that we continue to be in a place where we’re living year to year, month to month, trying to figure out what to cut without having an impact on public safety,” he told the council on Monday.

The city will have a much clearer picture of next year’s shortfall April 20 — after the tax vote — when Villaraigosa unveils his proposed budget.

Proposition A would generate roughly $215 million per year and leave Los Angeles with one of the highest tax rates in the state. While some union and business leaders back the measure, it is opposed by a handful of council candidates, as well as at least five candidates for mayor.

Council President Herb Wesson said he is “a little miffed” at some of those mayoral candidates, whom he accused of secretly praying for passage of Proposition A. “I don’t care what they tell you,” he said. “They do not want to be sworn in July 1 … and be given a document with $200-million worth of cuts.”

Hours after Wesson made his remarks, the council’s budget committee moved ahead with a plan to reclaim more than $27 million that had been set aside over the last decade for equipment and other expenses. Two-thirds of that was placed in an account that can be used to reduce the size of next year’s shortfall.

Szabo said his opposition to the tax does not simply stem from his critique of the numbers. He called Proposition A unfair to working families, especially if L.A.’s elected officials move ahead with plans to reduce or eliminate the city’s business tax. Mayoral candidates Garcetti and Wendy Greuel both want to phase out the tax, which generates more $400 million annually, over 15 years.

Increasing sales taxes while giving a break to businesses would deliver “a sucker punch to low-income communities,” Szabo said. “You do the math,” he added. “We’re going to take from one group and give to the other.”