C'mon Councilman Garcetti, let's stop altering reality

garcetti.jpgThe L.A. city councilman and candidate for mayor is too smart a guy to really believe what he told Los Angeles magazine in the September issue:

What's the accomplishment you're most proud of from the six years you have served as city council president?

Probably the most important thing is the role I've played during this budget crisis--a half-billion dollars in pension reform [over three years] and keeping the city from going into bankruptcy. I personally led those negotiations. I didn't bury my head in the sand, which is what some people did, just wanting to add a zero and say "This budget is balanced." But I also didn't say the city employee unions are our enemies. These are people who are providing amazing, critical services to us. We downsized the number of city employees by 4,900. We've raised the amount city workers pay into their pensions from 6 percent to 11 percent of their salary. There is no other big city in America that has done that. We're paying out of pocket for health care for the first time.

Though the budget is technically balanced, a chunk of the balancing act relies on some quick fixes, like furlough days in the city attorney's office. L.A. is still facing a huge fiscal crunch. In his last budget the mayor proposed cutting about 200 more jobs, but the council postponed any firings until January. Isn't that kicking the can down the road?

When you look at the money that the layoffs would have saved, it was paltry. Morale is about as important a driver as you have for productivity. And the impact of starting by saying we're going to have 200 layoffs in a staff of 36,000 is one of the most destructive things you could do.

No offense, but those claims - how shall I put this? - totally disregard reality.Too bad, really, because the councilman seems like a nice guy, and he has been nothing but gracious in my limited dealings with him. I wish him well because a lively, competitive mayoral race would be a good thing for the city. But c'mon Councilman - you've got to be kidding.

1)It is true that Garcetti has been working on budget matters, but I wouldn't be tooting my horn about the results. The city finances are a mess - perhaps not on the order of a Stockton or San Bernardino but enough to create a hollowing out of L.A. government. You want to know how the city has avoided filing for bankruptcy? By borrowing money, deferring maintenance and overtime, and moving pockets of available cash from department to department. (Here's my recent column in Los Angeles magazine.) Not exactly a stellar record.

2)The unions did make a few accommodations, but what the councilman leaves out is that the city remains saddled with $200-million-plus annual deficits over the coming years. As reported by the LAT, pensions and retiree healthcare costs are eating into the city's general fund - the main money pool for everything from library books to police salaries. Clearly, the recession put a huge strain on obligations. But city officials are to blame as well - in 2007 they agreed to a compensation package that guaranteed many city workers more than 25 percent in pay hikes over five years. Who does that even in the best of times?

3)The downsizing of city employees was handled in such a haphazard fashion that some departments lost huge swaths of their staffs, while others were barely affected. That's because there's been nothing systematic about the cuts: Folks who retired or moved to other departments were simply not replaced. One department head told me, "We couldn't decide who to eliminate, so we left it up to the city workers to decide." It got so bad at the city budget office that a group of retired city accountants had to come back on a temporary basis.

4)The layoff question is a bit of a con job. Fact is, people seldom get laid off in the city of Los Angeles because the public unions apply enormous pressure on the city council (only one employee was let go last year and none so far this year). It's easy for council members and union officials to turn a blind eye on the elimination of vacant jobs, but that's where the cuts have been largely felt.

Look, the city faces enormous pension and health care obligations that are forcing all services to be reduced to one degree or another. Pretending that a small increase in employee contributions will change that doesn't square with the facts. There are a few possible solutions - from voters calling for benefit cuts to slash-and-burn budget cuts to massive tax increases. None of those, however, is politically palatable - and asking city workers to reduce their pensions is probably illegal. The problem is that few folks at City Hall are willing to alienate their core constituencies, and so instead of raising fundamental questions about what L.A. can actually afford, their default mode is to bob and weave. Yes, deficits are a serious problem and yes the city better figure out ways to generate more revenue and yes future hires must accept smaller benefit packages. But no one is willing to accept the enormity of the problem because no one wants to take things away. It's just not how politicians think. Instead, the strategy, as always, is to give off the appearance of normalcy and pretend the problems will go away - or at least that the problems can be held off until they're out of office.

More by Mark Lacter:
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Socal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
Recent City Hall stories:
Garcettis are moving to Getty House in January
Council members at large (photo)
Greuel and others pitch Clinton for president (video)
Exit interview with Port of L.A.'s executive director
Garcetti on changing city hall culture

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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
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