LA Mayor Villaraigosa introduces budget

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Los Angeles Mayor Antonio Villaraigosa today unveiled his proposed budget for the fiscal year that starts July 1st. It's a $7 billion plan that's 1 percent smaller than this year's budget. It closes a $530 million deficit in part by privatizing city parking garages and throwing down the gauntlet to municipal employees. KPCC's Frank Stoltze reports.

Frank Stoltze: Few people know the city finances better than Ben Ceja. He's the mayor's budget director.

Ben Ceja: Across the board, we have several economically sensitive revenues that are really taking a hit, starting with property tax.

Stoltze: From the mayor's wood-paneled press room, Ceja runs down the list – he projects that property tax revenues next year will drop by $100 million, business tax revenues by $26 million, sales tax revenues by $16 million. Ceja says that to address such steep declines, the city will have to cut its labor costs.

Ceja: As total cost of the budget, it's probably between 70 and 80 percent. In some departments, it's more. In the police department for example, it's in the 90s.

Stoltze: Ceja's boss, Mayor Antonio Villaraigosa, proposes to eliminate nearly 1,300 vacant city positions. But he says the city's powerful labor unions will have to help avert layoffs by agreeing to an array of concessions – including giving up pay raises, taking off one unpaid hour a week, and contributing 2 percent more a year to pension funds.

Mayor Antonio Villaraigosa: If people decide that those concessions are not concessions that they want to exercise then I will be left with no other option – and neither will the council – to lay off somewhere in the neighborhood of 2,800 people.

Stoltze: The mayor said he'd even consider furloughs at the police and fire departments. He said the city can prevent that if unions agree to an array of other measures, including reduced overtime pay, reduced mileage reimbursement, and increased health care co-payments. Police and fire unions are about to start negotiating new contracts with the city.

Outside city hall, city workers offered mixed reviews of the mayor's proposal. This man's worked for the Information Technology Agency for just two years, and he'd be among the first to be laid off. He asked not to be identified.

City ITA worker: I would like people to do anything – whatever it takes to save positions. But I think its going to be tough to get people to collectively agree and say, "Yes, let's do this so we can all help people like myself keep a job," ya know.

Stoltze: Gerald Harris worked in the city's Sanitation Department for close to a quarter century. It's unlikely someone with so much seniority would be laid off. Harris says he's already taken one unpaid furlough day, and he's unwilling to concede more.

Gerald Harris: I've given already to the furlough and so now I want my share.

Stoltze: Labor union leaders have said they'd prefer early retirements to concessions or layoffs. But City Council President Eric Garcetti says early retirements are hard to manage.

Council President Eric Garcetti: We have to have the discipline that if we give people the packages for early retirement, we have to remember we can't hire behind them. That means we can't hire people to replace them. So we have to be very surgical about who retires.

Stoltze: Garcetti says that in general, he likes the mayor's proposed budget, including a plan to raise almost $80 million by privatizing city parking garages. He also opposes the mayor's suggestion to privatize parking meters too, saying that it hasn't gone well in Chicago.

Garcetti: It has been so badly managed and people feel so powerless over the rates, people are taking baseball bats to the parking meters. There's kind of a public outrage.

Stoltze: The mayor's also considering whether to privatize the L.A. convention center and zoo to raise money. In his budget, Villaraigosa proposes shifting tens of millions of dollars from capital projects accounts at the Community Redevelopment Agency and elsewhere to cover this year's budget, and using more than $100 million in federal stimulus money for transportation projects. He says he'll take his proposals to town halls across the city to drum up support.

Villaraigosa: This effort to save jobs and preserve services cannot and will not be limited to echo chambers of City Hall.

Stoltze: The first of the mayor's budget town halls is scheduled for Thursday in the western San Fernando Valley.