Voice of reason

That would be L.A.'s top budget analyst, Miguel Santana, who is talking about 500 more layoffs in addition to the 1,000 positions that already are threatened with elimination, according to the LAT. All told, you're looking at almost 4,000 job cuts - a painful but necessary step to deal with the deteriorating budget crisis. But Santana can only make recommendations - it's the mayor and the council that must make the final call, and as I noted in the previous post there's been lots of pushback over the last day or two. Here's Santana summarizing the situation:

"The recession which began in 2008 caused deeper revenue declines than any post-World War II recession," Santana said. "The recession was much deeper than anticipated in the budget and has greatly affected the majority of the city's revenue categories."

Basically, the city needs to find $208.6 million in savings by July 1. That won't happen through job cuts alone. From the Daily News:

Santana recommended the city take steps to eliminate the three agencies making up the Department of Human Services - the Human Relations Commission, Commission on the Status of Women, and the Children, Youth and Families Commission. The proposal would also eliminate the departments of Disability and Environmental Affairs, and cancel the Fire Department's next recruit class. But many of the proposals also involve transfers of money between departments and aim to protect some of the most popular programs, such as parks and libraries. Mayor Antonio Villaraigosa also plans to protect funding for the Police and Fire departments.

Now you know much of this probably won't happen. I'm already receiving mass emails from constituent groups lobbying to keep this or that department. So instead of taking the necessary trims and perhaps even dealing with L.A.'s byzantine management structure, they'll opt for a palsied approach - much like the early retirement plan put in place late last year. Put enough Band-aids on the wound - borrowing, more early retirements, furloughs, deferred spending - and perhaps they'll be able to limp on for a while. Hey, it's been working in Sacramento - why not here? If the economy shows any sign of bouncing back later this year, the pressure to do as little as possible will only increase. I know there have been whispers of bankruptcy, but it's not one of the likelier scenarios for any number of reasons, including the political costs. Having the city go into bankruptcy on your watch is not a very enticing credential.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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