Sat, Jun

Labor Agreements Crowding Out Homeless and Basic Services


LA WATCHDOG - The City recently entered into a new labor agreement with the Police Protective League that will increase compensation by $123 million this year and an additional $75 million next year (FY 2024-25).  The City is also negotiating a new labor agreement with civilian unions that will be effective on January 1.  It will increase compensation by an estimated $50 million for the last six months of this year and an additional $100 million next year.

According to the Four-Year Budget Outlook prepared by the City Administrative Officer, the City is anticipating a deficit of $68 million for next year which begins on July 1, 2024.  This does not include the impact of the new labor agreements which, if included, will increase the shortfall to over $400 million.

This will involve some drastic measures, including a cutback in basic services and possible furloughs and layoffs.

In this year’s budget, the City allocated almost $1.3 billion for the Homeless Services and Housing Program.  Major sources of funding include the General Fund ($472 million), proceeds from Proposition HHH bonds ($261 million), and $150 million from Measure ULA, the 4% and 5.5% tax on sales of property of more than $5 million and $10 million, respectively.

Of the above $883 million, $661 million is not in the budget for the upcoming fiscal year.  $250 million of the General Fund was a one-time expenditure.  All the $1.2 billion of Proposition HHH money has been allocated.  And the $150 million of Measure ULA is not available because it is tied up in litigation. 

The net is that the City needs $1.1 billion to maintain its basic services and fund its $1.3 billion Homeless Services and Housing Program.

One silver bullet would be the freeing up of the Measure ULA money from litigation.  This includes around $450 million that was prudently held back this year because of the litigation and another $600 million that is anticipated for the upcoming fiscal year.

While the Measure ULA money would be used for the Homeless Services and Housing Program, the City is still looking at significant shortfalls over the next four years.  The Budget Outlook showed a cumulative surplus of $1.1 billion over the next four years.  When adjusted for the new labor agreements, the four-year cumulative surplus turns into a shortfall of $1.9 billion, a swing of $3 billion. 

Talk about giving away the store!  This raises the question: Can we trust City Hall and our elected elite?  Obviously not. 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)

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