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L.A. tax measure could help pay for raises for city employees

The raises will cost $167 million annually within a few years, records say. Those costs will equal three-fourths of revenue that would be raised by sales tax hike.

February 13, 2013|By David Zahniser, Los Angeles Times
  • With Los Angeles facing projected budget shortfalls, some city leaders are advocating a sales tax hike. "One way or the other, we're going to have to make up that difference," says Miguel Santana, left, the city's top budget official. "The way we've been doing it so far is by reducing the size of the workforce. The question is, what is there left to cut?"
With Los Angeles facing projected budget shortfalls, some city leaders… (Irfan Khan, Los Angeles…)

At a time when taxpayers are being asked to dig deeper to resolve Los Angeles' chronic budget crisis, city employees are receiving raises that will cost tens of millions of dollars within a few years, according to records obtained by The Times.

Mayor Antonio Villaraigosa, an assortment of City Council members and Police Chief Charlie Beck are urging voters to approve a sales tax hike on the March 5 ballot that would boost the city rate to 9.5% , one of the highest in the state.

At the same time, thousands of police officers, firefighters and civilian employees are in the midst of receiving a two-year series of raises that were backed by the mayor and council. When all the increases are in place for a full year — the fiscal year that starts July 2014 — they will add $167 million annually to the general fund budget, which pays for public safety and other basic services.

The added cost of the pay increases will equal three-fourths of the new revenue the city expects to collect if the sales tax measure passes.

Opponents of the tax increase, Proposition A, argue that city leaders gave away too much to employee unions amid the economic downturn. Voting for the measure "only encourages more bad behavior," said Jack Humphreville, a neighborhood volunteer who wrote the ballot argument against Proposition A.

"They're basically trying to bail themselves out of a problem that they made for themselves," he said.

Councilman Paul Koretz, who favors the measure, said workers made key concessions that offset the raises they are receiving. Those include furloughs, or unpaid days off, and increased contributions toward employee retirement, he said.

"When raises were given during the [budget crisis], there were also givebacks," Koretz said.

Backers of Proposition A, which needs a simple majority to pass, say it is essential to stave off deep cuts to city services. Beck has warned that 500 LAPD positions will have to be eliminated if the measure is defeated.

Miguel Santana, the city's top budget official, said salary costs this year are the same as in 2007, partly because City Hall has thousands fewer positions. Villaraigosa argues that city officials have made key changes, including a rollback in pension benefits and an increase in the retirement age for new civilian employees.

"I believe and believe strongly that we've made a lot of cuts," he said. "Eighty percent of this structural deficit has been resolved because of cuts."

Still, increased salary costs are contributing to projected budget shortfalls in coming years. Santana has warned that the budget gap will reach $216 million in July — a figure contested by one former Villaraigosa aide — followed by $327 million the year after that.

"One way or the other, we're going to have to make up that difference," Santana said. "The way we've been doing it so far is by reducing the size of the workforce. The question is, what is there left to cut?"

Thousands of civilian workers represented by the Coalition of L.A. City Unions — a group that includes custodians, trash truck drivers, landscapers and others — are in the process of receiving three scheduled raises. A 3.75% increase was given last summer. Another 1.75% raise is due July 1, followed by a 5.5% hike Jan. 1, 2014.

Animal shelter worker Jake Miller said the raises are "modest" and should have no bearing on passage of Proposition A. "We deferred our raises three times already to help the city stay solvent. But we can't do it forever," he said.

Police officers and firefighters are receiving five raises over two years. An increase of 1% was provided July 1 and another 2% given last month. Three more increases — 1% on July 1, 1% on Nov. 1 and 2% on March 1, 2014 — are on the way, records show. When the five increases are in place for a full year, they will add $92 million annually to the general fund budget.

Santana noted that sworn employees went three years without pay increases during the worst of the financial crisis.

Not yet included in any of the city's spending and deficit projections are employee raises that could be approved after March 2014, as a result of a new round of contract talks set to begin later this year.

david.zahniser@latimes.com

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