Villaraigosa’s broken bank
Mayor Antonio Villaraigosa visited the Times editorial board this week to lay out details of his budget plan. Here are some highlights of that meeting.
Budget breakdown and decreasing revenue
Antonio Villaraigosa: So we’re clear about what we’re talking about the budget for the first time is the city’s budget at $7 billion. About $4.4 billion of that, $4.4 billion is general fund; $2.5 billion of that is special fund. That special fund isn’t what we’re really talking about for the most part here; what we’re talking about is general fund dollars. Within that general fund, I think the number is 86% of that is unrestricted, about 16% is restricted
Now, the total budget has grown by 2.8% from last year; the general fund has grown by less than 1% after accounting for proposed new revenues. The reserve fund balance is very important, and we’ll go through that right now. The reserve fund balance has been rebuilt to 4.3% from last year’s 3.1%, and despite the turmoil in the bond market, our bond ratings are among the highest of any city over $2 million
Additional highlights: We’re hiring 780 officers
Jim Newton, Times editorial page editor: That 780, is that net proposed for the year, or net gained over the year?
Villaraigosa: No, new officers.
Newton: I’m sorry, the net gain?
Villaraigosa: About 284 net officers. We’re going to synchronize, we’re going to expand street maintenance and repair to 735 miles and repair a million potholes during my administration That’s more potholes than anybody in this period of time ever. We’re going to synchronize 348 more traffic signals; install 147 new left-turn signals, again, unprecedented in our numbers; institute a professional standards division in the fire department; establish a 10-year community planning cycle; protect increases in core city services. We’re continuing to protect the expanded library branch hours at 24 branches, the 50-50 sidewalk program and tree-trimming
Total, what we’re looking in the city is $18 billion, but much of that is airports, ports and more importantly, water and power, the Community Redevelopment Agency and then grants and other non-budgeted. So that’s about $18.9 billion, 51,000 authorized positions, the other $7 billion
As you can see six of the city’s top revenue sources are considered economy-sensitive and account for 70% of the city’s general fund revenues. And why that’s important, everybody, I heard a couple of things and we just got to set the record straight here. We’re looking at this budget deficit as having everything to do with an economy that’s in a downturn. I’m not the only city facing it Chicago, New York, San Francisco, all across the country Nobody understood that we were going to have the confluence of economic forces, you know, the recession that according to the Fed chairman is not a recession. The mortgage lending crisis a year ago was not, you know, anything close to what it is today Over the last five years general fund revenues have been up around 6% each year, and now we’re down 0.8%, I mean, we’re up 0.8% so a dramatic decrease in the number of revenues.
Another thing that needs to be clarified so that we’re real clear about the numbers: This crisis that we’re looking at is a $406 million crisis. The raises that I read always referred to as the reason for it is $22 million $22 million this year. It’s a $406 million budget deficit. It’s all revenues; it in large part comes from the revenues that are down
Now, what does the budget call for? It calls for, as I said, the 780 officers, a net of 284. By the end of the year, we’ll be at the highest number of officers in L.A. history. By May or April of 2009, we’ll be at 10,000 officers, and by 2010, we’ll be at the 1,000 officers that I promised the people of this city
Newton: So you’re still on the track you set in 2005 for 1,000 officers over five years.
Villaraigosa: Yeah, that was the promise, that was the promise. But, if I could do it if we weren’t looking at this kind of budget deficit, I would have accelerated that, frankly, but obviously I’m going to keep the commitment given that I also have to protect other core services
The other thing that needs to be corrected is I’ve read a number of times that it’s just because of the hiring of police and fire. It’s not; it’s revenues are down, and they’re down substantially. Now, the number one area of the budget that we’ve increased 70% of the next expenditures have gone to police and fire that’s true. But the deficit that we’re facing is not just because of police and fire. It’s the downturn in the economy and the diminution of revenues that have come into the city
Zero-based budgeting
Villaraisgosa: Remember the zero-based budgeting ? Well I never talked about it, but I’m doing it We saved $4 million in this coming budget year because of it. We’re going to do the fire department, we’re going to do all the departments ultimately, including the police department, and force them to do zero-based budgeting
Now in the first year, apparently, the bigger the budget, the more difficult it is Historically what you do is, you have a budget and then you just add to it every year, and you never ask the question, “Do you really need all of this?” And we’re going to do that stuff again. I didn’t invent any of this stuff, but we’re doing things no other administration’s done before us, and we’re really starting. So we’re going to put performance-based management on all of our departments, including police and fire. Police won’t be in the first year.
Mayoral aide: On the performance budgets, we have it for all departments, and it’s in the budget book
Villaraigosa: But zero-based budgeting isn’t in there?
Aide: Right.
Villaraigosa: Sorry. Performance metrics, all of the departments, but zero-based budgeting is not going to be in this; it’s too big That’s going to take us two years probably.
