No Real Budget Reform Earns NO Votes on Tax Measures

LA WATCHDOG - The most significant problem facing the City is that Angelenos do not trust the Mayor, the City Council, and the political establishment.  After all, three former members have served time, and a fourth member is awaiting trial.  And the former President of the City Council resigned in connection with a secretly recorded meeting between three councilmembers and a union leader that had racial overtones. The other two councilmembers failed to be reelected.   

This lack of trust and confidence is reinforced by the failure of the City to deliver core services that include public safety and the maintenance of our infrastructure, including our streets, sidewalks, and parks. 

Underlying this failure is the refusal of the City Council and the Mayor to address the City’s Structural Deficit where the growth in expenditures exceeds the growth in revenues. Every year, the Mayor and City Council use fiscal gymnastics to balance the budget. This has led to lower levels of investment in the City’s physical infrastructure, underfunding the Police and Fire Departments, a bloated bureaucracy, and the possible layoffs and furloughs of City employees. 

The City Council and the Mayor have punted on budget reform. Instead, they created the Charter Reform Commission.  Unfortunately, this commission was behind schedule from the start because it took Mayor Bass eight months to make her appointments. And once the politically appointed Commission began its work, it was apparent that the real budget reform was not on its agenda, in large part because it was not a priority of the Mayor and the City Council, including the Budget and Finance Committee. 

Of the seven recommendations of the Neighborhood Council Budget Advocates (see below), it appears that the Commission will only follow up on one recommendation, that being to develop a two-year budget.  

This does little to reform the City’s budget process.  The two most important recommendations involve conducting open and transparent labor negotiations and a ballot measure that would prohibit the City from entering into a labor agreement that would result in a current or future budget deficit.  These, however, never saw the light of day because of the opposition of the campaign funding bosses of the public sector unions who have been feasting on the City’s purse and taxpayers for years.   

The Charter Reform Commission is scheduled to present its recommendations to the City Council in early April, at which time we will see if budget reform is or is not a priority.  We will also be able to review the Mayor’s Proposed Budget and the budget gymnastics on solving the projected $300 million shortfall on April 20th. We will also get a better understanding of the City Council’s view on the budget and budget reform before the June primary when we vote on three measures that will yield, if approved by the voters, around $200 million in new revenue.  But without real budget reform, why would we approve these measures?

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The Neighborhood Council Budget Advocates made the following seven recommendations (in order of importance) for budget and financial reform.  

1. Conduct open and transparent labor negotiations that require significant outreach to Angelenos before, during, and after the negotiations.
2. Place a measure on the ballot that would prohibit the City from entering into any labor agreement that would create a current or future deficit. In the short term, pass an ordinance. 
3. Establish an Office of Transparency and Accountability to oversee the City’s budget and finances in real time as recommended by the LA 2020 Commission. 
4. Update the Four-Year General Fund Budget Outlook to reflect anticipated raises for City employees. 
5. Develop a long-term infrastructure plan to address deferred maintenance and future capital expenditures.
6. Create a robust Reserve Fund that can only be used in declared emergencies, not to balance the budget as is the current procedure.
7. Develop a two-year budget as recommended by the City Controller.

(Jack Humphreville writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at [email protected].)