There's a general sense of hysteria — including the use of the "b" world (bankruptcy) — over Los Angeles' estimated $222-million budget deficit. Everyone seems very, very worried. The future looks even more grim, as the deficit is expected to rise to $427 million by 2014-15. There's abundant hang-wringing going on. But is $222 million really that big a deal?
The overall budget is about $7 billion. The deficit is less than 3 percent of that total. For comparison, New York City is running a deficit on a $70-billion budget that's more than double that of L.A. — and the Big Apple is delighted that it can reduce that to L.A. levels.
Miguel Santana, the Chief Administrative Officer, actually has a plan to close most of L.A.'s budget gap. This is from the L.A. Times:
Santana says about $150 million in new revenue is needed. Doubling the so-called documentary transfer tax imposed on the sale of property could bring an additional $100 million, he said. Raising the parking tax by 10% to 15% would bring in $40 million. Additional revenue could come from improved collection of parking ticket fees and ambulance billing, he said.
It's unclear to me why the city can't simply finance the rest. But I'll attempt to gain some insight there as this debate (or non-debate) rages against the the backdrop of the upcoming mayoral election.