Wednesday, April 11, 2012

Saving L.A.'s City Budget: More Taxes or Bankruptcy?

Last week Miguel Santana, Los Angeles' Chief Administrative Officer (i.e. our city's budget honcho), issued a report about the state of the city's finances. The city currently has a $222 million budget deficit. That number is only expected to increase in the next few years.

The report painted a dismal picture: While revenues have fallen, costs -- specifically costs of paying employees -- have not.

The city has cut close to 5,000 jobs in recent years, but it is still living beyond its means. The question is how the city will pay the bills. The report recommends taxes, potential layoffs, and farming out certain city services (like management of the zoo and the convention center) to private companies. An unsurprisingly contentious proposal suggests that we study different ways to provide for ambulance transport in the city. Read this as meaning different ways of hiring private companies. Currently the Los Angeles Fire Department (LAFD) provides such services. Four out of five calls to the LAFD are for medical emergencies. Would this be a smart economic move or a public health tragedy?

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