Three months ago, the city of Los Angeles teetered on the edge of insolvency. City leaders appeared unable to eliminate the $500 million budget deficit and lead Los Angeles out of its budget morass. Since then, the mayor and City Council made the tough decisions that will prevent another near-term fiscal crisis.
However, City Council members have come under increasing pressure to back down from making many of the tough cuts. Now it’s time for the business community to speak up in support of their difficult decisions and help keep Los Angeles headed down the right financial track.
The recent budget deal demonstrated that the mayor and the majority of the City Council are serious about facing down our deficit. With the help of the chief administrative officer and the city controller, city officials cut $500 million in spending. More than three-quarters of this amount represents long-term annual savings.
The approved budget reduces the city’s work force by 3,500 positions. This was achieved through a combination of early retirement incentives, eliminating positions that were vacant, and approximately 300 actual layoffs. According to the CAO, the city’s work force will soon be at the same level as it was at the end of Mayor Tom Bradley’s administration – nearly 20 years ago.
Tough choices
As every business person knows, layoffs are the most difficult decision we have to make. But because the city’s work force grew by 5,000 positions over the last decade and the majority of the city budget is personnel costs, a reduction in personnel was essential to overcoming the structural deficit of the city’s budget.
It should be noted that members of the City Council are still under pressure not to lay off any employees and save the 5.75 percent pay increase that any layoffs will trigger in the current city labor agreement. While this trigger will add $26 million to this year’s budget, the raises would go into effect eventually anyway because they were already agreed to as part of a long-term labor contract approved several years ago
It is important to acknowledge the severity of these budget cuts. There is no corner of the city that will be immune. The reality is that libraries and recreational centers will be open fewer hours. Tree trimming and pothole repairs will be delayed for months. Many programs that benefit children and seniors will be impacted. These are gut-wrenching decisions. However, as in our personal and business budgets, the city of Los Angeles must reduce the services that it cannot afford.
For city businesses and residents, we cannot be passive observers at City Hall. Now is the time for each of us to pick up the phone or write an e-mail to our council member. Tell them that you understand and support these tough decisions. They need to hear from you. Otherwise, there will be little incentive to make other tough decisions that will be necessary in the future.
Gary Toebben is the president and chief executive of the Los Angeles Area Chamber of Commerce.
