Business & Economy

Villaraigosa on Los Angeles's budget, potential layoffs

Los Angeles Mayor Antonio Villaraigosa speaks at the launch of the unaffiliated political organization known as No Labels December 13, 2010 at Columbia University in New York City.
Los Angeles Mayor Antonio Villaraigosa speaks at the launch of the unaffiliated political organization known as No Labels December 13, 2010 at Columbia University in New York City.
Spencer Platt/Getty Images

The Los Angeles City Council, heading into the Martin Luther King holiday weekend, voted to cut $18 million. That's a dent in the $63 million deficit for this year, but there's still a ways to go, as well as a projected $360 million deficit for the coming fiscal year. Los Angeles Mayor Antonio Villaraigosa spoke with KPCC's Larry Mantle Tuesday about the budget, layoffs and more, providing a state of the city for 2011.

"They did the right thing in making the cuts," says Villaraigosa. The City Council voted to lease city-owned parking garages to private operators, which Villaraigosa says will generate $53 million. He defended leasing the parking garages, saying that it was not a "core business" for the city.

"We still have a lot of tough decisions to make in the days ahead." What's going to be cut? "Well, virtually everything we do," says Villaraigosa.

"Public safety has to be our absolute priority. Every department will be cut, but, you know, some departments will be cut more." Departments that Villaraigosa specifically listed include street services, parks and recreation and libraries.

"Last year, we cut 400 people, laid off; 400 was the most in our city's recent history." More than several previous mayors combined, according to Villaraigosa.

Despite concessions from labor unions, Villaraigosa still expects more layoffs in the coming year as the city faces a $360 million projected deficit. "A $360 million hole is just too big to fill."

Villaraigosa wants to see more concessions from labor. They've already agreed to concessions in retiree health and co-pays, but the mayor says more needs to be done to bridge the city's deficit.

One proposal is a two-tier pension system, where new hires would receive lower level pensions than those already in unions. "On the ballot will be a new tier pension structure for fire and police. The Council is moving hopefully ahead to approve a package that will also include civilian employees." Villaraigosa says he's asking the City Council to do that as soon as possible.

The proposal on the table will, according to Villaraigosa, provide $255 million in savings for every thousand new employees hired. The retirement age is also up for debate in various proposals. Another proposal, according to Villaraigosa, would generate around $300 million per 1,000 employees hired.

Employees who've received raises have to take 26 furlough days, while others have 16 furlough days.

"I expect that layoffs will be a part of any budget solution," says Villaraigosa. "These aren't decisions that we make lightly. They certainly aren't ones that I feel good about. But we have to get our financial house in order." He said pensions and the pay structure for employees have to be sustainable.

The city may take another hit from the state, as Governor Jerry Brown's budget proposal does away with funding for redevelopment agencies.

"There's no way we're going to allow the state to take away these dollars in a time of economic crisis when we need them to create jobs," says Villaraigosa.

Villaraigosa has called it a non-starter, but he holds out hope it will be reversed. "It's a non-starter if you want to take all of our redevelopment money, if you want to take away the state enterprise tax credit. These are two tools we've used to create jobs in Los Angeles." Villaraigosa says 4,000 jobs have been created in the past year due to the state enterprise tax credit, while the number created by redevelopment may be significantly higher than that.

"We're willing to work with him, we're willing to share the responsibility," says Villaraigosa, but he says the state can't completely shift these costs to local governments.

Villaraigosa says that the difference between the city and the state and federal governments is that the city doesn't have the same ways to deal with their debt obligations. The federal government can print money during a fiscal crisis, and a state government can shift costs to local governments, but Los Angeles doesn't have either of these options.

Villaraigosa arrived in Washington, D.C. today to meet with federal officials. He said Tuesday he doesn't expect to get federal dollars to help Los Angeles, but he's been negotiating with the White House about cuts being made on the federal level.

"We understand there's going to be some cuts. What we would find unacceptable is you would completely eliminate those programs, and the White House is working with us." Villaraigosa says he wants to negotiate with the state as well. "We're hoping that Sacramento will work with us in the way the White House is working with us right now to negotiate these cuts."

Dr. John Deasy was recently selected as the new LAUSD superintendent. Villaraigosa commented on his selection by the City Council. "The one thing that sets him apart is he has an urgency of now that I think is really what motivates him and pushes him. He recognizes that reform must be transformational. He is going to be very aggressive in efforts to institute a number of changes, including how we evaluate our teachers – student growth over time and teacher effectiveness."

Villaraigosa says he thinks Deasy will partner with both schools and labor unions.

Villaraigosa also trumpeted a recent environmental victory – the L.A. Department of Water and Power reaching the goal of 20 percent renewable energy by 2010. "You wouldn't know it because you haven't read about it anywhere, except that people are talking about it all around the country and around the world."

"This was a huge feat. I mean, we started out at about 4 percent renewables," says Villaraigosa "And it's been with a bureaucracy that's fought us all along the way." Villaraigosa says he wants to set a goal of 33 percent by 2020, as well as getting the city off of coal power to change LADWP from the "dirtiest public utility to one of the cleanest."

Amidst all the doom and gloom, Villaraigosa did see another bright spot – the sunny, warm weather. "There aren't a whole lot of cities that can enjoy weather like this in the dead of winter."