Hidden Labor Agreements Wipe Out City's Surplus, Sparking Calls for Budget Reform
LA WATCHDOG - In June, the City’s Four-Year General Fund Budget Outlook anticipated a surplus of $1.1 billion. As a result of the actual and anticipated labor agreements with the City’s public sector unions representing the police, firefighters, and civilian employees, this surplus has vanished, and the City is now looking at a cumulative deficit over the next four years of $1.9 billion, a swing of $3 billion.
Unfortunately, this is not a one off. There are many examples of budget busting labor agreements negotiated behind closed doors that were approved by the Mayor and City Council without any transparency, independent analysis, or time for public comment.
In October of 2019, new labor agreements turned a four-year cumulative surplus of $200 million into a $1.2 billion deficit. This created major budget problems that were compounded by the impact of the pandemic.
In 2007, the City agreed to raises of 25% for the civilian unions at the same time as Mayor Villaraigosa demanding across the board budget cuts because of the impact of the Great Recession.
There are also other examples of fiscal irresponsibility involving our ring kissing elected officials and the campaign funding leaders of the City’s public sector unions.
The approval of budget busting labor agreements that create massive budget deficits is poor fiscal policy and is unacceptable. Now, with the establishment of the Ad Hoc Committee on City Governance Reform headed by City Council President Paul Krekorian, it is time to consider instituting budget reform that will halt the creation of rivers of red ink.
Over the last decade, some very simple and easy to implement reforms have been proposed that increase transparency of back-room negotiations between our self-serving elected officials and the politically powerful union leaders.
One is that any new labor agreements cannot create a budget deficit, both in the current year and in subsequent years. This would require the City to show that these agreements are fully funded by amending its Four-Year General Fund Budget Outlook to show the impact of the new labor agreements along with the underlying assumptions.
A second recommendation is to adopt a Civic Openness in Negotiations ordinance. This may involve the use of experienced outside negotiators, an independent auditor to analyze the impact of any new labor agreements, the transparent discussion of offers and counteroffers, the disclosure of private communications, and providing adequate time for the public and media to review and analyze the labor agreements and for public comment.
There is a high likelihood that the City will refuse to implement or even discuss the necessary budget reforms. If that is the case, we can refuse to approve any ballot measures that increase our taxes, whether it is an increase in the Measure H sales tax, the authorization of new bonds to construct $600,000 units of permanent supportive housing, or Governor Newsom’s $6 billion bond measure that is on the March ballot.
(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].)
