Los Angeles city, county and school officials Wednesday began bracing for - and plotting to fight - yet another round of budget cuts after California voters rejected a package of budget-reform ballot measures in Tuesday's election.
Anticipating the state will take money due local governments, Mayor Antonio Villaraigosa announced plans for a Sacramento lobbying trip next week to try to head off some of the expected losses.
"Sacramento will do what it always does and try to balance its budget on the backs of cities, counties and school districts," Villaraigosa said at a news conference at a downtown fire station. "I am not going to sit by idly and wait for them to act and then criticize it," Villaraigosa said. "I am talking to other cities and school districts and, as the mayor of the state's largest city, will go to Sacramento to make sure we are not punished for the state's problems."
Villaraigosa said the election pointed to a need for a complete overhaul of how the state carries out its mission. He would support a constitutional convention to rework the requirements the state has to pass a budget and enact new taxes. Los Angeles officials expect they will now have to reopen deliberations over the city budget, a $7.01 billion spending plan approved Monday.
City officials said they understand the state is considering a plan to create a pool of funds available to the city through a new bond. Villaraigosa is concerned that because of the state's bad bond rating, the city would have to pay more in interest than it would otherwise through its own credit rating.
Villaraigosa said he also has not ruled out the possibility of a legal challenge to any action taken by the state.
Options on the table
Chief Legislative Analyst Gerry Miller said the state has said it might take up to $120 million in Los Angeles property tax revenue. The city has options of issuing warrants to cover its costs or take advantage of any loans the state makes available through joint powers agreements.
Police hiring was the source of a major political battle in this year's city budget. The council agreed to provide $22 million to hire up to 480 new officers to replace those who are expected to leave this year. Villaraigosa had originally wanted to hire 560 more officers. Councilman Bernard Parks, who chairs the council's Budget and Finance Committee, has introduced a plan to have his committee re-examine the budget next week once the impact of Tuesday's election is better understood.
Much of what the city will be able to do with its budget will depend on concessions from the city unions, Parks and other officials said. Villaraigosa has asked the unions to forgo cost-of-living increases, agree to voluntary furloughs and increase their contributions to the pension system.
The Los Angeles Police Protective League released a list of suggestions the city could explore as ways to save money.
Among the recommendations is placing all city workers on a 4-10 schedule and closing city offices one day a week.
The league also suggested combining the police and fire pension system with the civilian system to save administrative fees, joining with the county and other agencies to form a cooperative to buy supplies, improving billing practices and seeking an end to the federal consent decree over the department.
Los Angeles County officials said the county faces the potential loss of hundreds of millions of dollars in funds that pay for health care, welfare and public safety services. Chief Executive Officer Bill Fujioka estimated the county will lose a total of $317 million in revenues this fiscal year and next, requiring cuts in drug treatment, child welfare, HIV/AIDS education and prevention, Medi-Cal and in-home care programs.
Fujioka also estimated the county will lose an additional $302 million in property tax revenues under the governor's proposal to borrow $2 billion in property taxes from cities and counties.
LAUSD facing new cuts
The defeat of the state propositions could mean up to $400 million in new cuts for the Los Angeles Unified School District, forcing the closure of programs and potentially leading to more layoffs, district officials said Wednesday.
Immediately, the district will have to cut $130 million by June 30, after already approving a budget plan that laid off more than 6,300 employees to close a $596 million deficit. The district also faces cuts of up to $273 million for next year, in addition to an existing $48 million deficit. District officials said the latest round of cuts could leave the district facing a $1.3 billion deficit by 2011. "We are on the edge of the precipice here," said LAUSD Superintendent Ramon Cortines. "And when I talk about a precipice, I am talking about not being able to make our payroll."
To come up with the needed cash, district officials will look at everything from cutting programs to employee furloughs and work-force reductions. "With $400 million in cuts, we may have to look at more layoffs," said Megan Reilly, LAUSD's chief financial officer. "We'll have to look at everything."
While the state's education code says that teachers have to be notified by March 15 of potential termination, there is an emergency provision that allows for teacher layoffs as late as August if the state is in a deficit year. Layoff notices to nonteaching employees can happen throughout the year with a 45-day notice. The district will also ask Sacramento for more flexibility to use state dollars. Those requests include using some specific program money to help pay for teachers and other critical services and also a plan to limit bumping of less experienced teachers by more senior teachers in underperforming schools to no more than 10 percent.
United Teachers Los Angeles President A.J. Duffy again urged the district to use all of its estimated $1 billion in federal stimulus funding to avoid laying off teachers and increasing class size. "We will continue to negotiate but we will also continue job actions to highlight to the L.A. community that we need to preserve education," Duffy said.
The 23-campus California State University system will face additional cuts of $410 million because of the failed state propositions, and the University of California will see a $322 million cut.
The cuts come after both institutions approved 10 percent fee hikes for their students and also curbed freshman enrollment for the first time in history.
