“The truth is that we cannot afford to continue to pay our city workforce… (Allen J. Schaben / Los Angeles…)
Warning that Los Angeles is facing insolvency, mayoral candidate and City Councilwoman Jan Perry outlined her plan Thursday for reforming the city's employee pension and benefits system.
"The truth is that we cannot afford to continue to pay our city workforce in its current configuration," Perry said in an address billed as her first major campaign policy speech.
Perry stopped short of opposing a controversial plan by former Mayor Richard Riordan to dramatically cut retirement costs by shifting employees to 401(k)-style retirement accounts, calling it "high risk," but said she would reserve judgment until further analysis was done.
Nevertheless she said she welcomes the pressure brought on by the measure, which is aimed at the May ballot. "I think it's a good thing, because it'll change the context of the debate."
For The Record
Los Angeles Times Sunday, November 11, 2012 Home Edition Main News Part A Page 4 News Desk 2 inches; 63 words Type of Material: Correction
L.A. pension reforms: An article in the Nov. 9 LATExtra section about Los Angeles mayoral candidate and Councilwoman Jan Perry's plan to reform the city's pension system referred to a plan by former Mayor Richard Riordan to cut retirement costs by shifting city employees to 401(k)-style retirement accounts. Under that plan, only new employees would be shifted. Current employees would keep their pensions.
Her address came three weeks after one of her opponents, Councilman Eric Garcetti, said he opposed switching to 401(k)-style retirement accounts for city employees. Candidate Kevin James supports Riordan's measure.
Instead, Perry said she would press city employees to increase the amount they contribute to their healthcare and pension costs. About 70% of the city's workforce pays nothing toward their health insurance premiums, said City Administrative Officer Miguel Santana.
The changes would save an estimated $44 million per year, Perry said. That savings would fill only a portion of next year's budget shortfall, which is projected to reach $216 million.
Perry said the proposals were the beginning of a larger conversation she hopes to have about the city's gloomy finances, which have led to widespread service cuts since the recession began.
Speaking in her signature matter-of-fact style to a small gathering of about 50 people, Perry offered a rather bleak outlook on the city's future.
"We're on the verge of almost being nonfunctional," she said afterward. If elected, Perry said, she would focus on maintaining core services, not increasing them. "In four years, I do not foresee an enormous amount of change," she said. "I think it would be incumbent upon me as the next mayor to hold the line on expenditures."
But Controller Wendy Greuel, who is also running, said the next mayor should strive to provide better services. "I don't believe that the residents of Los Angeles want to continue to see reduced levels of service," she said. "They want government to work."
Perry also said she would not support a proposed half-cent increase to the sales tax proposed by council President Herb Wesson for the March ballot. The tax increase, which a council committee will consider Friday, would generate about $220 million. Perry called it a gimmick that would forestall tough decisions. Greuel did not give her exact position on the tax, but says she has "serious concerns" about putting an increase on the ballot without addressing current spending.
Perry also took aim at her council colleagues for renewing a tax holiday for new businesses, calling it an example of how city leaders are favoring politics at the expense of sound financial decisions.
"It was passed not because it's going to create more jobs or because it would close our long-term structural deficit," she said. "It passed because it is an election year and it's a good policy on which to campaign," she said, adding that she has seen no evidence that it has helped the local economy. Perry voted to pass the tax holiday initially.
Garcetti spokesman Yusef Robb defended his boss' handling of the issue, saying: "It's obvious to Eric Garcetti that having the highest business tax in the county -- one that taxes businesses even when they lose money -- stops job growth in L.A."
Though she presented a stark picture of the decisions that face the next mayor, Perry also offered her hope for the future of the city, and her daughter, who will graduate from college next year.
"I hope that she'll be able to get a job. I hope that she'll be able to move out of the house by the time she's 30," she said.
Speaking from the Japanese American National Museum in Little Tokyo, part of her downtown Los Angeles district, Perry stood with her heels kicked off, behind the lectern. It was topped with a newly gifted daruma, a brightly painted wooden doll that's a good luck charm and staple of Japanese political campaigns.
Perry has lagged behind her opponents in fundraising, collecting less than half of what Greuel and Garcetti have each amassed in campaign cash.
But Perry, who is Jewish, said she is confident she'll do well with the city's black, Jewish and female voters. She pointed to the recent election of Jackie Lacey as Los Angeles County district attorney as proof that candidates can come from behind to win.