Los Angeles Mayor Antonio Villaraigosa proposed the elimination of 669 city jobs, 230 through layoffs, during a news conference this afternoon as he presented his final annual city budget for 2012-2013.
The mayor is looking to close the Los Angeles’ $238-million budget shortfall, and in addition to layoffs and job eliminations, he is looking to trim retirement benefits for new city employees. Current city workers can receive as much as 100 percent of their salaries when they retire, and the mayor’s proposal would roll that back to 75 percent for new hires. Villaraigosa proposed increasing the retirement age to 67; current Los Angeles city workers can retire at 60, or at 55 with 30 or more years on the job.
Villaraigosa also proposed using close to $83 million in one-time solutions that include payments from the dissolution of the city's redevelopment agency, special parking revenue for basic services and $29 million in Medi-Cal reimbursements anticipated for this year.
The remaining approximately two-thirds of the deficit would be solved through cuts or savings that are ongoing, including a 6- to 12-percent budget cut across across a wide swath of city departments. The mayor and L.A. City Council offices would each take an 8-percent budget cut under the plan.
The mayor's proposal would also require city workers to either pay 6 to 10 percent more toward their health insurance or pay more in co-pays and receive fewer benefits, starting Jan. 1, 2013.
In a speech last month the mayor cited rising mortality rates as a reason for the proposed changes, saying “I’m 59 years old, I work out every single day. I’m going to live a long time.” But proposing reduced benefits for city workers has raised the ire of the city employee unions, which have stated that few city workers actually receive 100 percent of their salaries because of existing retirement restrictions.
The budget will be vetted by the City Council over the next two months. The combined layoffs and position eliminations would save the city $26 million, according to the mayor's office.
Is cutting worker retirement benefits the right place to trim Los Angeles’ bloated budget? Where should the mayor look for places to cut?
David Lewin, Neil H. Jacoby Professor of Management, Human Resources & Organizational Behavior UCLA Anderson School of Management
Frank Stoltze, KPCC reporter