LA Mayor Bass Faces Tough Budget Decisions

Los Angeles Mayor Karen Bass is expected to present a budget Monday that proposes to eliminate hundreds of vacant city jobs to address an ongoing deficit in the hundreds of millions of dollars.

“Vacant positions do not fill potholes, sweep streets or staff parks,” Bass said last week during her State of the City speech. “And too many of these vacant positions have been there for years and years because of flawed budgeting that does not reflect how departments should actually operate.”

In his latest financial status report, Chief Administrative Officer Matt Szabo said a $476 million projected deficit for the current fiscal year is composed of $289 million in overspending and $187 million less revenue than expected.

The budget shortfall for the upcoming fiscal year, which starts July 1, is expected to be higher — in part because of generous labor contracts with the city’s multiple labor unions.

“The shortfall the mayor must close to get to a balanced budget for next fiscal year is estimated to be at least half a billion dollars,” said Rick Cole, the city’s chief deputy controller.

Cuts needed to balance budget

In his report, Szabo said the mayor and City Council would need to consider a variety of measures to address the projected shortfall, including:

• Eliminating up to 2,000 vacant positions, which could include non-sworn public safety positions; 
• Cutting departmental expense accounts, including those used for contractual services and overtime; 
• Reducing critical capital and infrastructure spending;
• Increasing fees for city services.

Szabo proposed eliminating 341 unfilled positions at the Department of Recreation and Parks alone, according to the report.

Although it's unclear how much money can be saved by taking vacant positions off the city’s books, Szabo estimated it could be as much as $150 to $200 million.

Bass has argued that removing vacant positions from the budget would not affect city services. During the State of the City presentation, she also promised to use the elimination of the vacancies to conduct better budgeting in the future.

“I am directing my office to conduct a comprehensive analysis of all city departments … so we take advantage of these tough times to determine how departments can function in a more efficient and effective manner,” the mayor said.

Departments have long used money from unfilled positions to cover overtime and other costs.

“General managers of departments have used those vacant positions to have greater flexibility in how they manage their budgets,” said City Council President Paul Krekorian, who nonetheless supports eliminating vacant positions.

Like Bass, he maintained there would not be “an immediate, significant loss of services by eliminating vacant positions.”

City Controller Kenneth Mejia has warned against wiping out vacant city jobs. Cole, the deputy controller, echoed his boss’ concerns.

“Many of those jobs are in fact very much needed,” Cole said. “If we have to save cash in the short run, we can simply not fill them. But to abolish them may be short-sighted.”

Spending on homelessness, policing likely protected

In a separate report, Szabo said new planned labor contracts with the city’s tens of thousands of unionized employees would add $316 million to the budget that begins July 1. The amount will grow to over $1 billion annually by 2028.

This city budget for the current fiscal year, which ends June 30, is about $13 billion.

Krekorian defended the contracts.

“Our salaries have not kept up with the cost of living increases that people have gone through,” he said. “If we expect to be able to recruit and retain the best people to do the services that the people need, they need to be compensated in a fair way.”

“I don’t think the contracts are overly generous,” Krekorian added.

Bass is expected to protect spending on the homelessness crisis. She is also expected to keep the Police Department’s budget intact with her proposed spending plan.

“My budget for next year maintains our LAPD staffing goals,” she said in her State of the City address. “We are sending a signal to our current officers and our community partners that we support them — that public safety is a priority for this administration.”

Public safety is a top concern among Angelenos right now, said Sara Sadhwani, a professor of politics at Pomona College.

“Police play a big role in helping people feel somewhat more secure,” she said.