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Greuel's budget draws ridicule

The controller's plan would cost far more than her opponents', experts say.

February 11, 2013|Michael Finnegan and James Rainey
  • City Controller Wendy Greuel has promised to hire 2,125 new police officers and 726 new firefighters and paramedics by 2020, as long as the budget is balanced and tax collections are growing. She declined to say how much the plan would cost.
City Controller Wendy Greuel has promised to hire 2,125 new police officers… (Luis Sinco, Los Angeles…)

City Controller Wendy Greuel has tried to set herself apart from rivals in the Los Angeles mayor's race by casting herself as a frugal budget expert well qualified to lead the city's recovery from chronic cash shortfalls.

But her plans for major expansions of the police and fire departments, along with her pledge to abolish the city's business tax, set her apart in a different way: Her agenda would cost Los Angeles far more than anything proposed by her opponents.

It would also make it harder to restore recent cuts in sidewalk repairs, tree trimming and other services, or to weather the next economic downturn, experts say. One of the next mayor's toughest tasks will be to close deficits projected to range from $216 million to $327 million a year.

The cost of Greuel's plans has drawn attacks from rivals who ridicule them as unrealistic. Independent analysts have also cast doubt on Greuel's numbers, as well as those of one of her rivals, City Councilman Eric Garcetti. He too supports eliminating the business tax. Neither candidate has a plan to offset the more than $400 million in revenue that would be lost, other than a hoped-for rise in tax receipts as new businesses move to Los Angeles.

For The Record
Los Angeles Times Tuesday, February 12, 2013 Home Edition Main News Part A Page 4 News Desk 1 inches; 40 words Type of Material: Correction
L.A. budget report: An article in the Feb. 11 LATExtra section about Los Angeles mayoral candidate Wendy Greuel's budget plans referred to a 2009 memo by the city administrative officer and chief legislative analyst. It was a November 2011 memo.

"When you put all of these things together, instead of a $200-million problem, you could have a $1-billion problem," said Keith Comrie, a retired city administrative officer who oversaw Los Angeles finances for 19 years.

Los Angeles County Supervisor Zev Yaroslavsky, who as a council member years ago chaired the city's budget committee and pondered a run for mayor this year, said Greuel's plan to expand the police force to 12,000 officers was "totally impossible without eviscerating other city services, including other emergency services" -- especially with the tax elimination.

"At some point, reasonable voters will ask, 'Is this serious or is this just political rhetoric?' and I think people will figure it out for themselves," he told The Times. "It's not doable. It's not real. It's an arithmetic problem, to quote Bill Clinton, and the arithmetic does not add up."

Yaroslavsky, who criticized Greuel's opponents for also failing to provide a blueprint for fiscal stability, is remaining neutral in the March 5 primary. He said he has not decided whether to back anyone in the May 21 runoff.

Two debate moderators -- Larry Mantle of KPCC-FM (89.3) and former Deputy Mayor Austin Beutner -- increased pressure on all the candidates last week to say how they would rein in soaring salary and pension costs. Beutner, who also considered a run for mayor, said deficits would otherwise persist.

Greuel's job as the city's chief accountant lends itself to shaping a political profile as a "tough fiscal watchdog," as she often puts it, but her call for higher spending and lower taxes threatens to jeopardize that image.

"There's a risk that if she goes too far, she could blow that credibility," said David O. Sears, a political science professor at UCLA.

Questions about the cost of Greuel's agenda come as Garcetti is trying to discredit her assertion that she has uncovered $160 million in "waste, fraud and abuse" at City Hall. Greuel says she would stop waste and "use the savings for job creation, better schools and faster emergency response." Garcetti mocked her vows last week as unicorns and rainbows.

A Times review found that more than half of the $160 million came from two audits. In one, Greuel merely identified money she thought should be shifted from one city fund to another. In the other, she relied on projected revenue that the audit conceded was "unrealistic."

Before her election as controller in 2009, Greuel served on the City Council for seven years. In 2007, she joined Garcetti and another mayoral hopeful, Councilwoman Jan Perry, in approving large pay hikes for city workers. Another mayoral contender, entertainment lawyer Kevin James, has portrayed the pay package as reckless, given the deficits projected at the time. As part of the deal, more than 13,000 clerks, librarians and other city workers will get a 5.5% raise on Jan. 1, 2014.

Also clashing with Greuel's pledge of fiscal restraint is her posture toward public employee unions as she seeks their support in the mayoral race. In a recent private meeting with union members, she took swipes at Garcetti for backing layoffs and furloughs when the recession triggered a sharp drop in tax collections. Garcetti has sought to turn the unions' tilt toward Greuel to his advantage, saying he made tough decisions to cut the workforce and reduce health and pension costs while others "stood on the sidelines."

Like all of the top mayoral candidates, Greuel opposes a March 5 ballot measure to raise the sales tax by half a cent to generate $200 million a year. If voters reject it, budget officials say, more layoffs are inevitable, along with broad cuts in police and other services.

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