A RULING against the Department of Water and Power and an adverse decision in a lawsuit challenging the city's right to tax cellphone service. Long-standing consent decrees that put LAPD behavior under court supervision. And even more recent judicial intervention into the personnel practices of city departments.
Every time Los Angeles is hauled into court, its systemic dysfunctions are revealed. But the courts rarely have solved the institutional failures behind them.
When the courts end up refereeing the messy business of making public policy, Los Angeles usually takes a hit for bending the law, passes the cost on to taxpayers and then neglects to change its habits. In all of L.A.'s recent losing cases, there is something diagnostic of the city -- of its reach and its failure to grasp, its deafness beyond the walls of City Hall and the terrible noise inside.
The Department of Water and Power and cellphone cases could mean more than $300 million in budget damage. In the DWP case, the school district and other public agencies contended that, under a state law since repealed, they should not have been charged the rates that other customers pay for electricity but only for their proportional share of the capital costs of building the electricity grid that serves them. The DWP will appeal, but paying back an estimated $223 million in electricity overcharges since 1988 isn't the real issue. It's the way the dysfunctional system at City Hall conceals the true cost of government.
Los Angeles needs every dime of DWP revenue, however it is calculated and collected, to cover structural budget deficits. By state law, the city must have a balanced budget. The illusion of balance has been maintained for years by moving revenue from the DWP to the city's general fund. About $175 million was transferred this fiscal year; an additional $185 million balances the budget adopted for the coming year.
If the DWP broke the law to maintain its revenue, it's because the city desperately needs the money and because it has become routine to subsidize the municipal budget with the department's revenue, which includes payments from the school district, the county, community colleges, the University of California and the Metropolitan Transportation Authority. That DWP revenue comes from taxpayers, of course. Ironically, many of them live in the city of Los Angeles. And in their multiple "citizenships" -- city, school district, county and so on -- lies the hidden tax of paying higher electricity rates.
