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Laying Off 1,000 City Hall Employees is Only a Third of the Solution

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Photo by RebelSciences [Kwasi B.] via LAist Featured Photos on Flickr
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A mid-year budget report addressed to Mayor Villaraigosa and the Los Angeles City Council last Friday evening had sobering, but not surprising news. Los Angeles is in deep financial trouble and it's going to take years to get out of it.

"This report confirms what we've known - this is the biggest recession we've seen since the Great Depression and the City of Los Angeles is not immune," said Council President Eric Garcetti in a statement. "Our goal will be to protect core services and maintain our city's financial health, and failure is not an option."

After the recession of the early 1990s, "it took five years for the major taxes to return to the pre-recession level and it took nine years for the City's most economy-sensitive revenue, the sales tax, to fully recover," explained the City's top Administrative Officer, Miguel Santana, in a memo about the report. "This lag is because rising employment and higher consumer spending trail economic recovery and actual City receipt of tax revenue lags consumer spending. Simply stated, local government revenue cannot recover from a severe recession until well after the recession ends."