Newton: Mayoral candidates, show us the money
The complaint I hear most often about this race for mayor of Los Angeles is that the candidates, Controller Wendy Greuel and Councilman Eric Garcetti, spend too much time talking in generalities without providing details about what they’d do. But when it comes to the city budget, the two candidates are so lost in the details that they often seem to be missing the big picture.
They may get a bit of a break this week with the city’s finances. Mayor Antonio Villaraigosa is expected to release his final budget Monday, and sources say the shortfall it anticipates has shrunk: Once projected at more than $200 million, it’s now said to be just over $100 million. Give the mayor credit: He’s made hard cuts in recent years, and though he didn’t eliminate the structural deficit, he’s reduced it.
But $100 million still leaves significant challenges for the candidates vying to succeed him. So what will they do?
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Let’s start with Greuel. Last week, she set forth her ideas for balancing the budget and delivered a long list of ideas that she says will add up to considerable savings. She believes, for instance, that altering the city’s pension investment strategies could generate $40 million a year. Is that possible? Hard to know, but who can argue with the concept?
She also says she would favor rules aimed at steering more city contracts to L.A.-based companies, which would allow the city to collect sales taxes on its own purchases and recoup $10 million a year. But that only pencils out if the items can be purchased within the city limits for the same price or less than they could be had from competitors outside Los Angeles. If it costs more to buy locally, higher price tags could cancel out increased tax revenue.
And what about the city’s pension liability? Greuel’s budget platform calls for her to “sit down with business and labor leaders” to “address the city’s obligation for current employees.” Start with the obvious weasel language of that promise, which pledges simply that she will “sit down” and commits her only to “looking at” those proposals. The more serious issue is that, by law, the city may not take away a pension benefit unless it replaces it with a “like pension benefit.” Bottom line: Greuel’s proposals on pensions might not save the city a nickel.
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And then there’s Garcetti. He promises to save $40 million by persuading employees at the airport, port and Department of Water and Power to increase their contributions to their own healthcare, but he can’t simply will that to happen, and they’ll fight him. He claims that, using the bargaining power of the mayor’s office, he will be able to deliver another $50 million to $70 million in savings by negotiating with healthcare providers for lower premiums. But as with Greuel’s promise to deliver higher returns on pension investments, there’s no guarantee he’d succeed.
Both candidates have their cases to make, and Garcetti’s here is noteworthy. “You have to negotiate it,” he told me last week. “The difference is that I’ve done it” — a reference to the pension changes he helped negotiate as council president.
Garcetti also proposes to sell the Los Angeles Mall, an eyesore of underground shops and restaurants near City Hall. Fine, but that’s worth perhaps $10 million and would have a one-time impact on the budget, much like most of Greuel’s monotonous pledges to eliminate “waste, fraud and abuse.”
And what about the two candidates’ obligations to city unions? Those unions have spent millions to help elect Greuel, and you can be sure they expect something in return. Garcetti’s made much of that in recent weeks, but he too has courted union support, and he’ll need their cooperation if elected. Those unions certainly believe that Greuel owes them, but Garcetti may be less independent than he seems.
In the month remaining until election day, here are some of the bigger budget questions for the candidates to consider:
• Both Garcetti and Greuel opposed Proposition A, which would have added a half-cent to the sales tax. No candidate likes to call for a tax increase, but where will the city get the money needed to preserve existing services, never mind the new ideas that these candidates tout? And no, collecting more from city parking lots, which both include in their budget plans, won’t do it.
• Even with some new money, the city won’t be able to afford to do all that it does today. What services can Los Angeles afford not to provide?
• Finally, what sacrifices are each of these candidates prepared to demand of city workers, including police officers, firefighters and employees of the DWP? Is either ready to ask workers to go without raises until the city budget is balanced? If not, why not?
Jim Newton’s column appears Mondays. His latest book is “Eisenhower: The White House Years.” Reach him at email@example.com or follow him on Twitter: @newton_jim.
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