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26
May 2010
Pew report details Los Angeles' budget woes

Los Angeles is one of the nation's most fiscally troubled big cities, according to a study by the Pew Charitable Trusts.

While all of the 13 cities in Pew's ongoing examination are feeling the budgetary pinch of recession, Los Angeles' deficit, about 11 percent of its projected budget, is the fourth highest, behind Chicago, Kansas City and Phoenix. Pittsburgh was found to be the least troubled of the 13.

"Like Detroit, Los Angeles was confronting a big shortfall, talk of municipal bankruptcy and distrust between City Council and the mayor about the extent of the problems, much less the solutions," Pew says in its report, "Not Out of the Woods."

"Mayor Antonio Villaraigosa put the general-fund shortfall at around 11 percent," the report adds. "After three months of acrimony with City Council that included a threat of partial government shutdown, a budget was approved that makes cuts across many city services, from libraries to child care to sidewalk repairs. The city would lay off between 761 and 1,761 employees, depending on possible union concessions and revenues from other actions."

"To raise revenue," Pew continues, "the budget calls for leasing 10 city-owned parking structures to private operators for an estimated $53 million a year. There would also be a 4.5 percent utility rate increase for the city-owned Department of Water and Power, a major source of the city's operating revenue. The budget also relies on various fee hikes, including higher parking fines, dog-license fees and asking voters to approve a new tax on billboards and other signs."

Although Los Angeles' budget remains troubled, there is one bright spot in the report for the state's largest city. Its pension plan for city workers was rated as being the healthiest of the 13 cities at nearly 90 percent of liabilities, well above the average of 64 percent.

The full Pew report is available here.

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