Politics

Elections 2015: Candidates avoid talking about LA's real problem, its structural deficit

The city administrative officer, Miguel Santana, projects Los Angeles will be in the red through 2017-18, but only if lawmakers keep spending in check and do not cut taxes.
The city administrative officer, Miguel Santana, projects Los Angeles will be in the red through 2017-18, but only if lawmakers keep spending in check and do not cut taxes.
Alice Walton/KPCC

One thing you likely didn't hear much from candidates running for office in Los Angeles: the city's structural deficit, the shortfall between revenue and expenditures.

"For the last decade, the city’s structural deficit has been an albatross around the neck of the city; impeding critical investments in services, infrastructure and technology," City Administrative Officer Miguel Santana said in a report.

He projects Los Angeles will be in the red through 2017-'18 — and that's provided lawmakers keep spending in check and don't cut taxes. If not, it'll take even longer to get in the black, he said.

That deficit is due to the city's obligations to retirees, including their pensions and health care.

But even putting that aside, it's not as if candidates for city council can totally change how the city spends its $8.1 billion budget. Almost half of it — 45 percent — is earmarked for certain uses because it comes from grants or special-use taxes.

When it comes to the part of the budget that is discretionary, 69 percent goes to firefighters and police.

Only 8 percent of the unrestricted budget is devoted to public works, which funds the things you hear candidates talk about so much on the campaign trail: street sweeping, fixing pot holes, trimming trees.

"It's lots of promises, like, 'I'm going to end homelessness. I'm going to do affordable housing. I'm going to fix your streets and fix your sidewalks,'" said Jack Humphreville, a member of the Greater Wilshire Neighborhood Council and a frequent critic of overspending at City Hall. 

"Just stick with the sidewalks and the streets," he added. "Where are you going to find the $5 [billion] or $6 billion to pay for that?"

Two years ago, council member Paul Krekorian, who chairs the city's finance and budget committee, held a series a workshops to educate candidates for local office on the city budget.

“The idea of those sessions was to help all candidates get a better idea of where we are,” Krekorian said.

Almost no one showed up. He said he understands why, but it speaks to the problem.

"When you’re busy campaigning, you’re out trying to create a message that's compelling to people," he said. Unfortunately, he said, sometimes they "don’t match the reality."

Krekorian – who is up for re-election himself – said he is concerned when he hears other candidates say they want to immediately eliminate the gross receipts tax, where businesses in Los Angeles have to fork over 0.5 percent of their revenue to the city. Some candidates say the tax drives companies out Los Angeles.

But it also brings in nearly half a billion dollars to city coffers every year.

"It’s 10 percent of our general fund," Krekorian said. "It’s more than we spend on the fire department.”

As a candidate, Eric Garcetti campaigned to end the tax. But after a year and a half as mayor, he has managed only to slightly lower it, beginning next year.

The disconnect between campaign promises and electoral reality is not just the fault of candidates, said Raphael J. Sonenshein, executive director of the Pat Brown Institute for Public Affairs. He said voters should be blamed, too.

"I think people are pretty uncritical during campaigns when they're told everything can be done," he said.

He said that, ideally, candidates who run on a platform to make tough choices and not over-promise what they can accomplish would be rewarded by voters.

"That's also a little bit risky," he acknowledged. "That's not necessarily the advice I would give a candidate if I was running their campaign."

A previous version of this story referred to a $242 million deficit. That figure referred to a projected deficit for this year, which was closed by the city through a combination of expense cuts and one-time revenues. The projected shortfall for the coming year is $165 million, which will be closed with similar measures before the budget is adopted. KPCC regrets the error.