Balancing the Budget


Bad Budgeting

The Los Angeles Times calls it “Villaraigosa’s $100-million cost shift.” A brief description of the latest trickery by City officials to promote the ruse of a “balanced” budget was put best by the Times: “Working in sync with the City Council, Villaraigosa has delayed paying for such obligations as police overtime, unused sick time, contractually agreed-upon wage hikes and an early retirement program that gave 2,400 employees full pensions five years ahead of schedule.” Who comes up with such budgetary games? Our City leadership does – regularly.
Such irresponsible tactics constitute bad budgeting, bad business, and bad precedent. They harm our future fiscal outlook and create even more uncertainty surrounding the City’s volatile fiscal condition. The Times even wrote that Mayoral candidates “Eric Garcetti and Jan Perry both voted for the strategy as City Council members, and candidate Austin Beutner served as a top Villaraigosa deputy when the complex policy was hatched.”

Controller Greuel once again neglected to expose such corrupt accounting – choosing instead to follow the media’s lead (perhaps with the hope they wouldn’t notice).

As simple as it may sound, the first step in truly balancing the City budget and solving the fiscal crisis created by current leadership is being honest with the taxpayers. This latest expose by the Times’ David Zahniser demonstrates the complex lengths the City Hall insiders are willing to go to in order to create the “image” of a balanced budget to protect their own political careers, while merely hoping the budget will fix itself.

The budget will not fix itself. The crisis created by out of control increases in employee compensation, health benefits, and contributions to pensions, compounded by the billions needed to repair and maintain our infrastructure (roads, sidewalks, curbs, parks, sewers, drainage systems, power lines, facilities, hardware, etc.), will not be solved by electing someone willing to implement such a crafty and deceitful budgetary tool as this “cost-shifting.”

As I wrote in CityWatch back on April 29 – our City leaders continue to use the Visa card to pay the Discover card bill.

Solving our budget crisis will take a combination of cuts in unnecessary spending, increases in government efficiency (including exposing corruption in order to end corruption) and an increase in revenues. Increasing revenues, however, does not have to mean raising taxes and fees (especially when the voters will vote down such attempts at tax hikes).

As I’ve maintained throughout this campaign, we can increase our general fund revenues without raising taxes and fees. A fair and equitable across-the-board reduction in our business tax burden and simplification of our business tax structure would make operating a business easier for our existing businesses (small, medium and large) and encourage new businesses to come.

The increase in volume (i.e., the number of entities doing business in the city) will cause an increase in business tax revenue, sales tax revenue, utility users’ tax revenue, parking users’ tax revenue, and even revenue from licenses, permits, fees and fines. In other words, we would see an increase in revenues from five sources of general fund revenue. Very recent studies have supported this conclusion.

Let me be clear, we can solve this crisis. We have the local talent, industry diversity, geographic advantage, and entrepreneurial spirit to – together – put Los Angeles back on track.

LA quietly declares fiscal emergency

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