Councilman Fears New Cuts Ahead

With Los Angeles facing a projected $484 million deficit in the upcoming fiscal year, the city government may have to resort to getting rid of some services, Councilman Greig Smith said. The City Council has already approved shedding 1,000 positions this year and 3,000 more in the 2010-2011 fiscal year. “The cutting is now done,” Smith said at his district office on April 7. “We can’t do anything more but elimination of services.” Mayor Antonio Villaraigosa has until April 20 to submit a proposed budget and the council is required to act on it by June 1. The new fiscal year starts on July 1. Declining revenues in seven taxing categories continues to plague the city, which, for the first time in 80 years, experienced double digit drops for three quarters in a row. As it may take up to a decade for the city to return to pre-recession revenue levels, the city needs to make drastic changes in what services it can and cannot provide, Smith said. The workforce will have to be more flexible to perform more duties; some departments may need to be consolidated to remove duplications; and some services will become privatized. For instance, the city spends $7 million on day care programs at seven parks but only brings in $2 million in revenue. The programs should be given over to private operators so the city can get out of a business it doesn’t do well in, Smith said. The city has also made changes to collecting unpaid fees, such as by ambulance transportation, by turning it over to a private collection agency. The city will also increase the ambulance transportation fee to match what Los Angeles County charges, Smith said. The councilman anticipates tough negotiations this year with unions representing city workers. The unions will have to make some concessions or else there will be additional staffing cuts, he said. “We will see a real digging in of heels by the unions,” Smith added. The city’s contribution to the pension program is expected to grow to nearly $1 billion for the 2010-2011 fiscal year as compared to the $300 million spent three years ago. Changes can be made to replace the defined benefit system with a defined contribution system but it would only apply to new hires, Smith said.