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Fight between Riordan and unions upstages L.A. sales tax decision

As Richard Riordan and unions go head to head over the former L.A. mayor's pension-overhaul plans, the City Council agrees to put a half-cent sales tax increase before voters in March.

November 20, 2012|By Catherine Saillant and Christine Mai-Duc, Los Angeles Times
  • Former L.A. Mayor Richard Riordan urged the City Council to refrain from putting the sales tax hike on the ballot until it had exhausted other ways of repairing the city budget. The council, however, voted 11 to 4 to place the tax increase before voters during the March 5 primary.
Former L.A. Mayor Richard Riordan urged the City Council to refrain from… (Mark Boster, Los Angeles…)

A ferocious battle between former Los Angeles Mayor Richard Riordan and the city's police and civilian unions broke out at City Hall on Tuesday, overshadowing a City Council action to help stabilize municipal finances by putting a sales tax increase on the ballot.

The 82-year-old Riordan strode to the podium Tuesday morning, urging the council to refrain from putting a sales tax hike on the ballot until it exhausts other ways of repairing its chronically underfunded budget.

"What Los Angeles needs is more jobs, not more taxes," Riordan said shortly before the council voted 11 to 4 to place a half-cent sales tax increase before voters during the March 5 primary. "Enough is enough. More and more taxes will not be used properly to bail out our budget problems."

The subtext of the day, however, was taking place behind the scenes. Riordan's camp distributed copies of an email in which a union organizer called on members to sign "fake names/addresses" on a sweeping pension initiative ballot petition being circulated and bankrolled by Riordan.

If roughly 265,000 valid signatures are collected, the measure switching new city workers into 401(k)-style retirements instead of defined-benefit pensions would appear on the May 21 general city election ballot. Riordan called the email a "dirty trick" meant to thwart that effort.

In an interview with The Times, he said changes to the pension system are essential to keeping city government solvent, and that he's ready for a tough campaign.

"I am prepared to make it happen," the multimillionaire businessman said when asked about the potential cost of facing off with unions known to raise large amounts of money for city political campaigns. "A lot of other people will be chipping in. I have the advantage of having a lot of good contacts with a lot people who care about this city as I do and will help."

Signing fictitious names to a voter petition is a felony under the California Elections Code, according to Kimberly Briggs of the city's Election Division. At Riordan's request, Los Angeles County Dist. Atty. Steve Cooley has agreed to investigate the union email.

Later in the day, events compelled the Service Employees International Union Local 721 to take the embarrassing step of disavowing the organizer's email.

"SEIU 721 in no way recommends that its members or anyone else falsify signatures on any petition," said Ian Thompson, a union spokesman. "We are firmly against that kind of behavior. The email in question was sent without the knowledge of the union's leadership. The person who sent the email has been disciplined for his action." The sender was identified as four-year union employee Paul Kim, a worksite organizer.

The Los Angeles police officers' union in recent days got in its own swipe at Riordan, faulting him for failing to conduct an actuarial study of the potential costs or savings to the city should his pension measure pass. The Police Protective League contends 401(k)-type plans would cost the city even more than the current taxpayer-backed pensions.

Riordan shot that down, saying previous studies conducted in California and nationwide show that retirements that shift risk from the taxpayer, as in a defined benefit pension, to the public employee, as in a 401(k)-style contributory plan, make labor costs more predictable.

"We are doing another study right now mainly for political purposes because the opponents have thrown that at us," he said. "But it's clearly not true."

Meanwhile, a measure to increase the sales tax in the city by half a cent, hiking collections by $215 million a year, won final approval. The council majority has said 5,000 positions have already been cut, furloughs imposed and pensions trimmed to try to control costs.

Now, however, new revenue is needed to stabilize the budget. The only other possibility is more layoffs and service reductions in libraries, parks, street paving and police and fire budgets, some council members say.

Although the sales tax hike does not need support from Mayor Antonio Villaraigosa to appear on the ballot, the mayor declined to sign the measure, saying that the city should pursue additional workforce reductions before seeking a sales tax hike. The mayor also advocates privatizing the Los Angeles Zoo and the Los Angeles Convention Center, as well as consolidating some departments, to save money.

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