In the most honest and straight forward budget presentation in the last ten years, Mayor Eric Garcetti presented his “Back to Basics” budget at a Monday morning press conference at City Hall. This $5.1 billion General Fund budget is $250 million greater than last year’s Adopted Budget, representing a 5% increase.
Garcetti’s budget focuses on four key areas: public safety; a prosperous city where the City’s bureaucracy is service oriented and not an impediment to business; an environmentally sustainable city that has better streets, sidewalks, and other amenities; and a well-run City government that is focused on customer service and results, not process.
The General Fund budget includes increases for the Police and Fire Departments of almost $40 million, the repair of more streets and sidewalks, improved code enforcement by Building and Safety, and a number of other important initiatives, including better management information and budgeting systems.
There have also been some changes in the budgets of individual departments as a result of Performance Budgeting, where the emphasis is on achieving goals and desired outcomes, not on line item budgeting.
Eric was upfront in telling us that this budget was just the beginning, that the upcoming budget year (2014-15) was one where the City closed the $242 million deficit and invested in some key initiatives, that the next year is one of stabilization, and the following year is one of growth. To use his analogy, this is a marathon, not a sprint.
However, a quick analysis of this budget reveals that it is balanced based on one time revenues of $176 million, including a transfer of $129 million from the previous sacrosanct Reserve Fund that was needed to fund increases in pension contributions and healthcare premiums.
This budget is also very fragile. It assumes that there will be no increases in salaries for all City workers, including the police and firefighters, and that civilian workers will contribute 10% to the cost of the premiums for their Cadillac healthcare plans.
In any case, this held-together-with-strings budget clearly demonstrates that the City cannot afford any more increases in salaries and benefits. Otherwise, the City would have to cut back on core services, not a very acceptable option for our new mayor and the City Council, and one that is sure to infuriate the voters.
The budget will now go the Budget and Finance Committee of the City Council for its review, comment, and hours and hours of hearings, with the City Administrative Officer responding to numerous requests for information and alternatives. The City Council has until June 1 to adopt or modify the budget, at which time the Mayor has five days to approve of veto the City Council’s changes, subject to a two-thirds override vote.
Cross-Posted at LA City Watch.