LA city budget deal averts layoffs, furloughs - for now

The Los Angeles City Council and city labor unions have agreed on a budget plan that averts layoffs and furloughs - for now.

The agreement, a copy of which has not been made public, saves an additional $78 million from the Coalition of City Unions.

The unions agreed to increase the pension contributions to 7 percent, up from the current 6 percent.

Those who retire early will have to pay 1 percent of their pension benefits.

The agreement is subject to a final vote by the LA City Council and ratification by unions.

The plan puts pressure on the early retirement package that the unions had lobbied hard for.

Mayor Antonio Villaraigosa said he is satisfied with the plan. But the agreement puts pressure on the contract negotiations between the city and the union that represents the rank and file officers.

City number crunchers say they need to shave $129 million from the LAPD's more than $1 billion budget.

The LA City Council made the agreement after days of negotiations to address a $400 million budget shortfall. Labor union leaders had argued the city should enact an early retirement plan instead.

The negotiations were marked this week by a parade of city attorneys, librarians, sanitation workers, and mechanics who funneled through the city council this week asking members to approve an early retirement program.

Lower than expected tax revenues have contributed to a $400 million deficit. A report from City Administrative Officer Miguel Santana said that an early retirement program designed to save the city money wouldn’t actually do that.

Santana said forcing most city workers to take every other Friday off and laying off more than 900 workers were the fastest ways to address what he called a "rapidly deteriorating financial picture."

"As horrible as furloughs are, what they do provide is they provide immediate relief to our fiscal problem," Santana said earlier. "And layoffs would go a long way to mitigate the problem not just for this year but for next year as well when the problem is expected to be as bad if not worse."

City council members, many of whom got elected with the help of labor unions, were trying to figure out how to preserve the early retirement program.

Villaraigosa, who helped negotiate it, said he’d veto it. He’s endorsed the idea of furloughs and even layoffs for all but police and fire departments.

But he did say that the unions that represent cops and firefighters will have to give up more.

"If the police and fire unions accept a cut this year, we can avoid furloughs, we can avoid layoffs," he said earlier this week. "They won’t even take a 2 percent cut. That’s outrageous, given this economic situation. And yet they’re still engaging in a demagoguery that’s unacceptable."

City finance officials say L.A. is spending a million more dollars a day than it’s taking in, and bond rating agencies that already have the city on a negative watch list want definitive action to reduce spending or raise revenues soon.