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L.A. County budget to preserve services, official says

The county will be able to preserve most services in its $23.3-billion budget despite a $220.9-million shortfall, county chief executive says.

April 19, 2011|By Rong-Gong Lin II and David Zahniser, Los Angeles Times
  • County Chief Executive William T Fujioka cites supervisors fiscal restraint.
County Chief Executive William T Fujioka cites supervisors fiscal restraint. (Allen J. Schaben, Los Angeles…)

In a major contrast to the financial woes at Los Angeles City Hall, L.A. County officials trumpeted the release of a budget Monday that calls for no layoffs, furloughs or major program cuts.

"We're in a position better than most," County Chief Executive William T Fujioka told reporters, saying the county was able to preserve most services in its $23.3-billion budget despite a $220.9-million revenue shortfall.

Officials at City Hall, on the other hand, face a shortfall more than twice as large, even though its general fund budget is $4.4 billion. The shortfall is expected to reach $457 million and could result in as many as 36 furlough days for non-public safety workers who do not agree to contribute more toward their retiree healthcare.

The city's top budget adviser warned last year that retirement costs could consume nearly a third of the budget by 2015, drastically reducing the amount of money available for public services, unless major changes were made.

At the county Hall of Administration, officials credited years of tight-fisted budget decisions. Fujioka praised the five-member Board of Supervisors for resisting moves to dramatically increase spending during boom years while denying generous retirement benefits to its employees in the last decade, even as other governments did so.

"The real reason why we're in the position we are in … is the fiscal discipline of our board," Fujioka said, crediting the long tenure of the officials who employ him.

Four of the five supervisors have been in office for at least 14 years, and term limits will not begin to force them out of office until 2014.

Fujioka expressed his desire that the term limit law, approved by 64% of voters in 2002 to limit supervisors to three four-year terms, be repealed.

"I'm the first one to say that we need to repeal term limits," Fujioka said. "When you have a group of individuals who know they're going to have to live with the consequences of their actions, they become much more responsible."

Fujioka contrasted the supervisors' record with that of the state Legislature, where lawmakers are termed out of office every six years in the Assembly and every eight years in the Senate.

"You have individuals who kick the can down the road because they say, 'I don't want to deal with the deficit.'" Fujioka said.

To be sure, users of county services have felt reductions as county coffers have been strained by the recession. Last year, for example, cutbacks at the library system left some branches open only four days a week. Fujioka denied that was a major reduction in service, noting some cities have had to close entire branches.

Helping the county's situation are projections of an improving economy. Sales tax revenues are expected to increase by 5% in the new budget year that begins in July; and property tax revenues are expected to increase by 0.76% — the first increase since 2009.

Fujioka also credited the supervisors with not approving generous retirement packages. L.A. County offers 2% of an employee's salary for each year they work as long as they have accumulated 30 years of service, meaning someone could earn 60% of his salary upon retirement, Fujioka said. In contrast, San Bernardino County offers 3%, giving a retiree there access to 90% of their salary.

Fujioka said the county was able to bridge the $220.9-million shortfall by a mix of actions such as eliminating vacant positions, getting unions to forgo a cost-of-living wage increase, consolidating departments and using $185 million in surplus money for capital projects that were cheaper than expected. The county will also finish paying off a bond issued in 1994 to pay for pension obligations, freeing up more than $100 million.

Nonetheless, the county will be stressed by other issues. Welfare demand is on the rise, from a monthly caseload of about 59,000 in the 2006-07 fiscal year to a projected 114,440 for 2011-12. Also, department budgets will be cut by $35.1 million, which will include eliminating vacant positions; cutbacks in supplies, such as the purchase of computers and copy machines; and consolidating jobs, such as merging the Office of Affirmative Action Compliance with the Department of Human Resources.

Fujioka said, however, that the county's budgetary outlook could change depending on budget negotiations in Sacramento and Washington.

A few blocks away at City Hall, Los Angeles Mayor Antonio Villaraigosa is expected to release a budget Wednesday that relies heavily on concessions from various labor unions to close the city's huge budget gap. If those givebacks are approved, the city will not need to lay off a single employee, said Matt Szabo, Villaraigosa's deputy chief of staff.

When the mayor delivered his State of the City speech last week, officials put the city's shortfall at $350 million. Szabo said that shortfall is actually larger because of two factors: Villaraigosa plans to rebuild the level of services in the Fire Department, and he does not yet have support for extending a cap on police overtime pay for a third straight year.

ron.lin@latimes.com

david.zahniser@latimes.com

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