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City Hall

villaraigosa4.jpg Mind-boggling (and kind of sad) on several fronts, not the least of which is that he apparently did it publicly during an Oscar party. (Someone should tell him not to job hunt in a crowd.) "He glided past film stars and caught up to O'Reilly, flashing a welcoming grin," the Weekly reports, citing an unnamed Oscar partygoer. "Then Villaraigosa loudly asked O'Reilly for help landing an on-camera job. Villaraigosa said he wanted 'to speak to [Fox News CEO] Roger Ailes' about 'going to work' at the network." The thrust of the piece is that the mayor hasn't much money - certainly not enough to live life as he has for the last eight years. That means fancy meals, free concert tickets, police protection, and drivers taking him wherever (he doesn't even own a car). No doubt he'll get job offers, but they have to be the right kind - offers that provide him with enough exposure for a future run at higher office (I wouldn't hold my breath on that one). What's also interesting about the piece is the deeply divided opinions about his job performance: Lots of folks hate him, of course, but a surprising number love him (or at least like him a lot).

Villaraigosa's years of legally required "statements of economic interests" from 2001 through 2012 verify that, aside from a few thousand dollars he annually collects from a modest rental home he owns in Moreno Valley, he has no revenue streams, no financial investments. No stocks. No bonds. (The Weekly could not determine how much public pension Villaraigosa will collect, or when. Through a spokeswoman, Thomas Moutes, head of the Los Angeles City Employees' Retirement System, said LACERS has "no records" regarding this public information.) Villaraigosa has been paid a total of $1,682,937 as mayor, a serious chunk of which, for the past several years, has gone to his ex-wife and children in alimony and child support. He has risen to the 1 percent, in practice if not in fact, by relying heavily on other people's money. Taxpayers, private groups and foundations have footed huge travel bills, as Villaraigosa spent fully 42 percent of his official city working hours, according to his own calendar, out of town between Sept. 1 and Dec. 16 last year. His personal schedule also reflects, on the eve of his departure, a onetime man of the people who regularly sits down with billionaires such as Eli Broad and Forever 21 founder Do Won Chang -- but rarely with activists or ordinary people who know firsthand what's happening in L.A.'s communities.
City Hall

Good luck policing L.A.'s new marijuana restrictions

medicalpot.jpgIf city officials still don't know how many dispensaries are operating in the city - estimates range from 700 to 1,400 - how on earth will they enforce a ballot measure that restricts the number to 135? Well, they probably won't. Here's another question: How does the city keep tabs of any business? Yeah, I know you supposedly need a business license and a fictitious name filing, but does anybody really keep tabs on this stuff? From the LAT:

[Jane Usher, a special assistant city attorney], acknowledged that some of the now-outlawed dispensaries would probably continue to operate. "There will be efforts to fly below the radar," she said. Dispensaries that don't comply with orders to close will be sued, she said. Adam Bierman, a consultant who helps people open dispensaries, predicted that profitable dispensaries will remain open as long as possible. "Some of them generate a million or two [million] dollars a month," Bierman said. "You think those people are just going to pack their bags and leave?"

One more thing: The medical marijuana dispensaries that are not among the lucky 135 will probably go to court. That could drag out the issue for many more years. It's another example of what happens when legislators abandon their responsibility to enforce statewide mandates.

City Hall

galperin.jpgThat would be attorney Ron Galperin, who easily defeated City Hall insider Dennis Zine for a job that reminds me a little of a newspaper ombudsman: Broad discretion in critiquing how the place is run, but little or no authority to force the real honchos to make changes. Since Galperin is an outsider, he might have an even tougher time getting noticed beyond pro-forma press releases. That's especially true in his dealings with the City Council, which has shown only limited interest in following up on audits prepared by the Controller's office. Frankly, I'm not sure how much help the job turned out to be for Wendy Greuel, who seemed preoccupied with lower-level government miscues that were merely symptomatic of larger operational issues. Galperin might want to spend some quality time with former Deputy Mayor Austin Beutner, another outsider who recognized the breathtaking inefficiencies of L.A. government (if only Mayor-elect Garcetti could convince Beutner to come back). Making friends on the inside wouldn't hurt either - cranking out audits that end up collecting dust won't do any good, no matter how well-meaning you happen to be. Here's what the LAT had to say in endorsing Galperin for the job.

*I've been reminded that Galperin was a real estate reporter at the Los Angeles Business Journal in the late 1980s. First time a Business Journal reporter has moved on to elected office, Howard Fine tells me.

Business Update on KPCC

First order of business for Mayor-elect Garcetti

garcetti.jpgWell, it's the budget, of course, which is still $100 million or so in the red because the city has to keep paying out those out-sized pension and health care benefits. Looking to stem the deficit, the City Council had signed off on a an increase in the retirement age, along with a reduction in benefits for workers who are hired after July 1. But the public unions are fighting those changes. There is also a 5.5 percent pay raise that outgoing Mayor Villaraigosa had proposed to eliminate - though what the new mayor decides to do is anyone's guess. Frankly, the two candidates had been their usual vague selves during the campaign on how exactly they'd deal with budget issues. Maybe we'll finally find out. From this week's Business Update on KPCC:

Steve Julian: Where does the city stand now in terms of debt?


Mark Lacter: Well, L.A. is obligated to help cover retirement and health care costs - even if it means cutting back on city services. The good news is that the economy has been improving, which means that more tax revenue will be coming in. But, that's not expected to fully offset the pension obligations, and those obligations might actually increase over the next few years, which puts city officials in a tough spot. Do they try cutting back on employee benefits even further, which would surely create more animosity with the public unions, or do they keep things more or less status quo, which will continue to put the squeeze on services. One more thing: will the new mayor be able to work in concert with the LA City Council (which - after all - has the final say in all budget matters)?

Julian: It's a reminder that the mayor has only limited power, isn't it...

Lacter: Some might argue that it's City Council President Herb Wesson who will be really in charge. This is the challenge that's been faced by previous mayors, and that's why it's so important for [Garcetti] to establish some sort of working relationship with the council. One area that's bound to come up is the city's business tax, which both candidates would like to eliminate. They think dropping the tax will help attract and retain businesses, which is totally at odds with what you'd expect from these two liberal-leaning Democrats. But they are convinced that doing away with the business tax will mean more jobs for L.A.

Julian: If you drop the tax, can that lost revenue be made up?

Lacter: Well, not likely - and, as we see with the pension problems, L.A. needs all the revenue it can get. More broadly, there's the matter of doing business in L.A., which still can be a minefield of rules and regulations (though, in some areas it's a little better than it used to be). In years past, mayors have tried to attract industries into the city - biotech was one, electric cars was another - though incentive-type programs don't have a great history of working out well.

Julian: What about tech or Silicon Beach, as they're calling it?

Lacter: That's certainly a success story - you have all kinds of software firms and Web designers setting up shop on the Westside. But, that's not the result of anything the city did - it's just young entrepreneurs wanting to be close to other young entrepreneurs, and all of them wanting to work near the beach.

Julian: Is there one challenge facing the new mayor that's more challenging than all the others?

Lacter: The same thing that faces any elected official in L.A.: controlling the influence of special interests (an issue, by the way, that didn't receive much attention during the campaign, perhaps because both candidates were receiving contributions from those same special interests). You know we rely on elected officials to consider all sides, and the two candidates were talking a good game during the campaign. Of course, what's promised before an election and what happens once they're in office are not always the same thing.

Life

Words can speak volumes in describing social change

Google's database of 5.2 million books published between 1500 and 2008 provides some interesting clues about usage - and perhaps about attitudes. Citing a study, NYT columnist David Brooks writes that "personalized," "self," "standout," and "unique" were used more often between 1960 and 2008, while "share," "community," "collective," "and "common good" were used less frequently. Another study found that "virtue," "decency" and "conscience" were used less frequently over the course of the 20th century. From Brooks:

Over the past half-century, society has become more individualistic. As it has become more individualistic, it has also become less morally aware, because social and moral fabrics are inextricably linked. The atomization and demoralization of society have led to certain forms of social breakdown, which government has tried to address, sometimes successfully and often impotently. This story, if true, should cause discomfort on right and left.
Campaign 2013

How did L.A.'s mayor's race get to be a punchline?

election3.jpgSeveral out-of-town budinskis have called the campaign an embarrassment for L.A., which was certainly not the case (Washington is where you'll find the real embarrassments). Let's just say that the race, like so many others these days, was a missed opportunity - drowned out by posturing and positioning by the city's interest groups, eclipsed by the intractable problems that no mayor is remotely capable of mending. It's been easy to beat up on both candidates (I've certainly done my share), but let's be clear that Wendy Greuel and Eric Garcetti are bright, well-meaning people who have devoted most of their working lives to public service and are passionate in their belief that L.A. can be a better place. So why was it so flat, so off-key?

--Waaaaay too long: This has been a two-person contest going back to the first part of the year, well before the initial election, and since then the race has been mostly about killing time with lots of over-spending and over-endorsing. Having the runoff drag out for three months is lunacy (one month between elections makes a lot more sense). Future candidates should also consider cutting back on the number of debates - the stultifying sessions between Greuel and Garcetti might have actually lowered interest in the race.

--Little substance: Much of the campaign had a "first do no harm" quality. This was especially true of Greuel - did anyone else want to scream each time she suggested that the city's money troubles could be corrected by stamping out waste, fraud and abuse (not remotely true) or that helping operate her family's small business provided some sort of managerial gravitas to run the nation's second-biggest city? Garcetti was disingenuous himself by claiming too much credit for reducing (but hardly solving) the city's structural deficit - and offering little indication of what he plans to do once the city begins contract talks with public unions.

--Crisscrossed interests: How on earth was Greuel supposed to lay out a coherent policy message when she had endorsements from both former mayor Richard Riordan, who has blamed the city unions for L.A.'s budget troubles, and the city unions? She couldn't even take a position on something as straightforward as moving one of the LAX runways for fear of pissing off somebody (either nearby homeowners who vote in droves or L.A.'s business establishment). But that's the nature of the job. If she can't handle that, how will she deal with the pension problem?

--Chronic voter ignorance: Most Angelenos haven't a clue about what the mayor does - or more important, what he/she does not do. Both candidates, for example, spent much of the campaign laying out their views on education when in fact the mayor has no control over the L.A. school system. An entire debate was devoted to education issues! Where a mayor can exert influence is on planning policy, which received next to no coverage. And what about dealing with the City Council? Some might argue that the elected official with the most power these days is Council President Herb Wesson, and yet we have no idea how the new mayor is likely to work with him or the full council.

--Chronic voter apathy: As the LAT reported last week, low turnouts go well beyond the current election (though having two unexceptional personalities with much the same politics doesn't help). What's unfortunate this time around is that the city's innards are falling apart. Mayor Villaraigosa and the Council have applied enough duct tape to make it seem as if things aren't all that bad because no elected official wants to face the truth on his or her watch. What the city should offer its citizenry, in good times and bad, is the real issue behind this year's race, but if no one is willing to fess up - candidates as well as voters - how on earth can we expect any change?

Real estate

L.A. assessed valuations projected to jump in 2013

homesales3.jpgHere's another explanation for the improving fiscal outlook: Property is gaining in value. L.A. County is expected to see a 4.23 percent increase in revenue-producing valuation, to $1.125 trillion, according to the assessor's office. Changes in ownership, which include the sale of homes, is expected to increase by $18.5 billion. This, of course, is good news for local governments, which will be taking in more in tax revenues - thus easing their budget problems - and it's also good for homeowners who have seen the value of their properties creep back up after several down years. Property tax revenue for the city of L.A. is already coming in above budget projections for 2012-2013, although budget officials have been somewhat concerned about the durability of the recovery. By way of perspective, county valuation totaled $1.07 trillion in 2012, $823.7 billion in 2005, $569.6 billion in 2000, and $412.8 billion in 1990. From the forecast:

The previous decline in the real estate market resulted in decreasing assessment rolls from 2007 through 2010. The 2011 and 2012 assessment rolls reflected modest increases of 1.49 percent and 2.24 percent, respectively. Based on a variety of indicators, the Office of the Assessor estimates that the 2013 Assessment Roll will increase by approximately 4.23 percent. The estimate is based on the best information available at this time; however, there are several areas that are subject to change as new trends emerge.
Economy

Whatever happened to those dastardly budget deficits?

deficit3.jpgThe state Legislative Analyst's Office says that Gov. Brown's projections were too pessimistic and that California should expect $2.8 billion more in tax revenue than what the administration was estimating. Meanwhile, the federal budget deficit, which topped out at $1.4 trillion in 2009, is expected to drop this year to $642 billion, or just 4 percent of GDP (well within safe limits). Long-term spending is still a problem, especially when it comes to entitlements, but it's not a short-term crisis. So what cleared the clouds? From Time magazine's Christopher Matthews:

Basically, the change can be explained by a combination of a recovering housing market -- which has improved the finances of government-owned Fannie Mae and Freddie Mac -- combined with a better-than-expected economy overall, which is boosting corporate and personal income tax revenues. This economic improvement is happening despite higher taxes and budget cuts enacted as part of the fiscal cliff deal reached in December, and the sequestration-related budget cuts that went into effect recently. This change is yet another vindication of economists and commentators who argued that large budget deficits are the natural outgrowth of effective economic policy in the wake of a severe recession. Economic recession reduces employment and corporate profits, lowering tax revenues. At the same time, safety net programs like unemployment insurance and food stamps must spend more to accommodate the larger number of people who need them.

This is stuff you learn in an introductory economics class - government is needed a lot more in bad times than in good times. With the economy getting better, albeit slowly, that reliance not only is starting to recede, but it's being replaced by more money coming in. Good news, but not all that surprising news. And yet, for five or so years, really going back to the financial crisis, debate out of Washington has focused on those dastardly deficit numbers and how they would destroy the country. Bloomberg's Josh Barro nails it:

[House Speaker] John Boehner doesn't really care about the public debt, as he made clear when he repeatedly supported debt-expanding measures under a Republican president. What Boehner and House Republicans really want are excuses to cut federal spending, particularly on programs such as Medicaid and food stamps that support low-income Americans. But those cuts are unpopular, so Republicans frame fiscal debate to make such cuts appear necessary to avoid disaster. If you can't borrow or tax more, and can't cut old-age entitlements or the military, which command the majority of federal spending, you're not left with many options but to soak the poor.

So where has the media been during this week's stunning recalculations? Well, mostly covering the Washington pseudo-scandals (this week's Congressional hearings have been farcical). Check out the amount of time that CBS, ABC, and NBC have spent on the revised deficit projections: A grand total of 0.00 minutes. Fiscal matters make for boring television unless somebody - usually a Republican - yells "crisis."

Economy

Average retirement age is creeping up... to 61

retire3.jpg Yeah, I was surprised it was that low - but that's still up from 1991 when the average retirement age was just 57, according to a Gallup survey. Much of the increase has come since the recession (those still in the workforce expect to retire well past 61). By the way, the biggest concern among non-retirees is having enough money to live on. Matter of fact, there's so much fear about running out of savings that one study recently said that many Americans in their 70s and 80s tend to under-spend. From press release:

Currently, 37% of nonretired Americans say they expect to retire after age 65, 26% at age 65, and 26% before age 65. The most notable change over time is the increase in those expecting to work past age 65 -- the 37% this year is up from 22% a decade ago and 14% in 1995. Meanwhile, the percentage of nonretirees who say they expect to retire before age 65 has declined to 26% from 49% in 1995.The percentage who say they will retire at exactly 65 has held fairly constant over the decades.
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