Los Angeles Mayor Antonio Villaraigosa Monday released his final budget proposal before leaving office, in which he called for solving the city’s projected budget deficit by rescinding scheduled employee pay raises and requiring them to pay 10 percent of their health premium contributions.
The idea of employees paying more into their healthcare benefits “is not a radical notion,” but rather a “sustainable notion,” Villaraigosa said in outlining his proposed 2013-14 budget.
The city is projected to face a $150 million to $165 million budget deficit, revised down from the $216 million anticipated months earlier. City leaders in March pushed a half-cent sales tax ballot measure to help make up the budget shortfall, but it was rejected by voters.
The majority of city employees are scheduled to receive a 5.5 percent pay raise on Jan. 1, the “last installment” of a 25 percent raise agreed to years earlier, while most employees do not contribute into their healthcare plans.
City leaders have worked in recent years to reduce a billion-dollar deficit, which Villaraigosa said was partially due to the 25 percent pay increase for employees that he and the City Council agreed to right before the economic downturn.
“I felt compelled to make up for that,” the mayor said, adding that the increase was approved on the recommendation of a previous city administrative officer.
If his budget plan is followed, Villaraigosa said, the next mayor could end his or her term with a $15 million surplus.
His spending plan maintains police ranks at 10,000 officers and puts $292 million into the city’s “rainy day” reserve fund, while projecting $111 million in increased revenue from various taxes to help close the budget gap.
The budget also calls for using one-time federal and state money to fix deteriorating city infrastructure.
Cheryl Parisi, head of the Coalition of L.A. City Unions, which represents 22,000 employees, said that while they were happy about the commitment of funds for “road repair and tree trimming,” the budget “does not go far enough to protect the people of L.A. now and in the future.” The city needs to “restore, revitalize and renew this world-class city,” she said.
Parisi’s coalition represents city employees in a variety of areas, from tree trimmers to librarians to 911 operators. The group does not include Department of Water and Power workers and sworn police and fire employees.
Councilman Paul Krekorian, who heads the council’s Budget and Finance Committee, called the mayor’s proposed budget “another step in the right direction” following measures taken in recent years to come out of the red, “but any optimism should be tempered by the reality that we still have much more work to do.”
“Our economic recovery is still slow and fragile, and all of the gains we’ve made in reducing the structural deficit could be lost if the city falls back into its old habits,” he said. “Starting April 30, the Budget and Finance Committee will begin 2 1/2 weeks of lengthy daily hearings, in which we
will closely examine every part of the proposed budget and question the managers of every city department.
“My goal in the committee hearings will be to ensure that the city’s budget reflects our residents’ priorities and values while eliminating the structural deficit for the long term,” Krekorian said.
Former Commerce Secretary Mickey Kantor said the LA 2020 Commission, the independent panel that was recently formed to study solutions to Los Angeles’ budget deficit, has decided not take make recommendations until “after the mayor’s race.”
City Councilman Eric Garcetti and City Controller Wendy Greuel are facing off in a May 21 runoff election to succeed Villaraigosa.