Drastic Steps Needed to Prevent Bankruptcy

As you know, the City of Los Angeles faces a budget shortfall of nearly $208 million, and we expect it to exceed $400 million next year. This is the most serious situation we have faced in 75 years and without drastic steps, the City is threatened with bankruptcy. We cannot allow that to happen.

As the City Council and the Mayor consider the Three-Year Financial Sustainability Plan, we will make the most difficult decisions that any of us have faced. Cutting services and laying off employees are the last steps that any of us want to take.

But bankrupting the City is not an option. The bankruptcy courts would force the City to implement even more drastic cuts and impose far more layoffs than we now face.

Many in the public and the media have responded with alarm at reports that proposals to cut, consolidate or re-organize City departments would mean “gutting” important services that the community depends on. Most of the proposed cuts and consolidations are in Cultural Affairs, Environmental Affairs, Department of Neighborhood Empowerment, Department on Disability, and Human Services. The cuts would not eliminate the programs but would re-align their functions in other departments, which would eliminate duplicative administrative costs.

The council must have the fortitude to do what needs to be done to ensure the financial survival of the City.

The time is now to cut the fat, and make sure the community receives the most essential core services they pay taxes for. Those are Police and Fire protection, street services, water and power, sanitation, parks and libraries. For too long, the City has grown into a bloated bureaucracy, providing services that can be met far more efficiently, effectively and less expensively by the private sector and non-profit organizations.

The editorials in the  LA Times  and the LA Weekly this week got it right. The City has more than 34 commissions and boards and 49 departments and bureaus. Not every service requires its own commissioners, offices, office equipment, and administrative staff. The City must concentrate on the services that are at the core of its mission: public safety and infrastructure.

Of the 1,000 job cuts that are proposed, 360 are positions that would be moved off of the general fund (which pays for basic city services) and into special funds. This will save the city $50 million this fiscal year. This is key because 70% of discretionary general funds are devoted to public safety. That leaves approximately $1 billion to pay for every other city service other than Police and Fire. 
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