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Cities feeling the pinch

Local governments are laying off workers and cutting services while hoping for federal aid.

April 24, 2010|By Richard Simon, Los Angeles Times

Reporting from Washington — Colorado Springs is planning to turn off a third of its streetlights, though residents can adopt one for $75. An Ohio judge told residents they might want to arm themselves after the county cut half its sheriff's deputies. Ocean City, Md., is ending its curbside recycling program.

Even though the economy is showing signs of recovery, these remain tough times for cities and counties, and it's likely to get tougher. So local governments want what Wall Street and carmakers got: federal money.

Concerned that a wave of municipal layoffs could set back the nation's economic recovery, congressional Democrats are pushing a $100-billion bill that would provide $75 billion in federal aid to help cities and counties preserve jobs.

The bill, which has gained 151 cosponsors in the House, also provides an additional $23 billion to help preserve teachers' jobs. Most of the remainder would go to aid police and fire departments.

"Without help, an ongoing local government fiscal crisis could well undercut the nation's recovery," Riverside Mayor Ronald O. Loveridge, president of the National League of Cities, told a congressional committee recently.

The legislation, introduced last month by Rep. George Miller (D-Martinez), a close ally of House Speaker Nancy Pelosi (D-San Francisco), is gaining support among House Democrats who are eager to reduce stubbornly high unemployment in what is shaping up as a tough midterm election for the party in power.

However, it faces uncertain prospects in the Senate, where Republicans have sought to block increased spending without cuts, prompting city officials from red states to step up their lobbying.

Although last year's $787-billion economic stimulus package provided money for a wide range of local projects, city employment levels are at their lowest since 1980, Miller said. The National League of Cities calculates that state and local governments will lay off as many as 1.5 million people between 2010 and 2011.

"Though you may see folks coming out of the recession in other sectors, you're seeing the opposite in cities," said Eve O'Toole, a Washington lobbyist for the League of California Cities.

Cities — while facing increased demands for services — have seen their tax revenues continue to decline because of persistent high unemployment, home foreclosures and reduced state aid.

Los Angeles Mayor Antonio Villaraigosa has proposed as many as 750 layoffs — on top of 105 pink slips this year — to help make up for a projected $485-million shortfall. San Jose is looking at reducing its municipal workforce to its lowest level in two decades.

"We're now beginning to see cities cut fire and police services," Loveridge said. "The pain is real."

Municipal finances are not expected to bottom out until next year, according to analysts at the National League of Cities. Even in a recovering economy, there is often a lag before heavily property-tax-dependent cities feel the full effect of lower property values.

Miller's legislation would provide $75 billion over two years to help cities and counties stave off layoffs, hire back laid-off workers and assist nonprofit groups in preserving jobs that provide public services, such as meals to seniors.

The bill would steer more money to high unemployment areas, which would benefit California, with a 12.6% unemployment rate, among the highest in the country.

Los Angeles would receive $325 million in the first year under the bill, according Miller's staff. A spokeswoman for Villaraigosa said that the L.A. mayor supported the bill, but that the city wasn't counting on any of the money at this point.

Bailout fatigue and Washington's own budget problems are formidable challenges.

"Everybody at every level has to understand we need to tighten up a little bit — or maybe a lot," said Republican Rep. Howard P. "Buck'' McKeon, former Santa Clarita mayor.

Rep. Jerry Lewis (R-Redlands), who represents the Inland Empire, has "consistently opposed these bailout bills because they keep adding to the federal deficit," said his spokesman Jim Specht.

Yet city officials from Republican-held districts are stepping up their efforts to persuade their representatives to support the bill.

"The stark reality is that economic conditions continue to get worse for local governments," Mayor Virginia Madueno of Riverbank in the Central Valley said in a letter to Rep. George Radanovich (R-Mariposa).

The bill also has gained the backing of members of the Congressional Black Caucus, which has pressed the Obama administration and Democratic leaders to do more about the 16.5% unemployment rate among African Americans.

richard.simon@latimes.com

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