Is Los Angeles The Worst Managed City In America?

The Budget Crisis

California has been dealing with a ballooning budget crisis for the past 8 months, but the latest flash point of major financial crisis is now hovering over the City of Angels. The city faces a budget deficit close to 1 billion, and could be effectively bankrupt by the summer. How is it even possible that one of the biggest and richest city in America be in such state of disarray?

Everybody in Los Angeles is feeling the pinch as city officials are randomly and drastically cutting spending. First cuts were made in education and social services, and it is now the turn of critical sectors of public life and basic safety to fall under the ax of deep budget cuts. The fire department, in an effort to cut labor cost, has been forced by the city to take crews and paramedic units off the job one day a week through fire stations around Los Angeles. And the cuts are likely to get more severe in the very near future.

Mayor Antonio Villaraigosa is increasingly facing the heat even from within the city council. Last week, Villaraigosa was greeted in the city council chamber by booing city workers after he announced an order to eliminate at least 1,000 city jobs. And there will be thousands more to come for next year indicated Villaraigosa.

“I do not see a scenario where there will not be layoff, not only this year but next year as well. We will not be able to meet our financial obligations sometime in the summer if we don’t act now,” the embattled Mayor said in front of the city council last week.

Others within the council, such as council Janice Hahn, do not see eye to eye with the Mayor on the cut of city employees. Hahn was cheered by the crowd present in the chamber when she argued that laying off people at this juncture would only compound the financial crisis by increasing a soaring unemployment- more than 12 percent in LA county- and put the laid off workers at risk of losing their houses.

The Options Considered by The City Council: A Lack of Vision

An option which the city of LA is taking under serious consideration is to privatize numerous city properties and assets such as the convention center, city garages and even the zoo. Many city in America are going through tough times as local tax revenues- mainly property taxes- have plummeted in conjunction with the recession driven by the real estate bubble and the foreclosures epidemic.

But let’s face it, these remedies considered by the city will not be enough to make the city solvent before the summer. Of course the logical approach should be to increase revenues and also raise taxes. Raising taxes is always unpopular with voters, but it could be the only way for Los Angeles to stay solvent and avoid bankruptcy.

A few options should be on the table: The city could levee a temporary tax on gasoline sold in the county; a toll system on the freeway system would also generate substantial revenues. A perfect example of the city lack of vision and gross mismanagement is an ordinance passed by the city council to shut down most of the medicinal marijuana dispensaries, which were one of the only booming businesses of the city. The ludicrous argument used by the city council was to claim that such businesses “attract crime”. This brings us to our last, and perhaps most damaging argument against Mayor Villaraigosa and the city council at large.

The Los Angeles Police Department Is The $1.2 Billion Gorilla Draining The City Coffers

Mayor Villaraigosa does not have his priorities straight. He has no problem making cuts in all the important sectors of public life-including the fire department- but he is absolutely adamant about not cutting the city Gargantuan police force. The LAPD has 15,000 employees and an annual budget of $1.2 billion.

Even though the budget short fall will top $1 Billion this summer, the city spent between fiscal 2008 and 2009 an astronomical $500 Million for the swanky new headquarters of the LAPD. In April 2009, Villaraigosa and former LAPD chief Bratton announced plans to increase the police department by 10,000 officers. Since then chief Bratton left office to start his own private security firm. This is counterproductive at best, in fact more equitable allocation of city resources such as education, public transportation, prevention efforts and affordable housing would lessen the need for more policing by investing instead in sustaining the communities.

“To Protect And Serve”?

Mayor Villaraigosa’s obsession with “security” is unfortunately shared by most American politicians either Democrats (such as Villaraigosa) or Republicans. It is an irrational policy, and further constitutes a disaster in the making in Los Angeles with its massive police department. It is the same grave systemic problem on the federal level with the military spending, for the sake of “keeping America safe” we put an unbearable and unsustainable strain on the federal budget.

Just think about it for a minute: Los Angeles spend on its police force $1.2 Billion a year, and as a nation we will spend $720 Billion on Defense for 2011. The motto of the LAPD is “to protect and serve”; the 15,ooo employees from the police department will not have much to protect when mid-summer comes and the city is bankrupt from spending too much on them.

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12 Responses to Is Los Angeles The Worst Managed City In America?

  1. John February 14, 2010 at 3:21 am

    Worthless article. Yes, let’s cut the funding to one corrupt organization and transfer it to four other corrupted lump of coal. Try this one on for size

    Proof that illegal aliens are bankrupting Los Angeles

    Fix that first, then the other problems can be worked out one at a time.

    • Gilbert Mercier
      Gilbert Mercier February 14, 2010 at 8:51 am

      You are not proving anything with this article, John…..except your racism, if you are in agreement with the premise of this rant. You did however send some of your friends here.

      • Ted February 14, 2010 at 10:20 am

        I’m curious how John’s linked article proves his racism. I read the article and race was not mentioned once. But nicely played, Gilbert. It’s common knowledge around Southern California that any complaint of rampant illegal immigration can usually be effectively fought with absurd screams of “racism.” However, tacitly implying that thousands upon thousands of illegal aliens living in Los Angeles have no bearing on the city’s finances is incredibly naive.

  2. Lee February 14, 2010 at 5:49 am

    I agree with John… this really was a worthless article. There are hundreds of people associated with “managing” the city of LA. You would need to explore all of those positions to make an accurate assumption that poor management is the downfall of LA and trust me Mayor V. isn’t the root of the problem.

  3. maxam February 14, 2010 at 6:56 am

    The solution is to have Mexico pay us for taking care of their citizens who they abjectly neglect! We should shame them!! Wasn’t it just last year that the richest man in the world was Silva of Mexico, the telecom baron!! The racism in Mexico is much more pronounce and crass! Anyone coming here should kiss the ground and learn english!

    Make Mexico pay!

  4. st February 14, 2010 at 10:59 am

    There are about 10M people living in L.A.
    $1.2B works out to $120 per person.
    For a family of four, about $40 per month.
    Alternatively, what’s the problem with cutting 1,000 jobs?
    Hard on those cut, but probably good for the city as a whole.

    • Gilbert Mercier
      Gilbert Mercier February 14, 2010 at 11:32 am

      Good point. There is however another way to raise tax revenue in LA county which I did not mentioned in the article.
      Let say you bought a house at the pick of the real estate market for $500,000(house A). Your annual property tax is around $6,000 give or take. But a very similar property(house B) next door to yours was bought in 1996 (when the market was low) for a price of $250,000. Both houses are today worth about the same amount but the owner of the house bought at $250,000 only pays half of the property taxes that the owner of the property bought for half a million currently pays.
      Not only it is an unfair taxation system penalizing owner A, but it also constitutes something which could very easily and substantially boost tax revenues if the taxation calculation on property B would be subject to appraised value and not only purchase price.

  5. Amy Beth February 14, 2010 at 11:34 am

    I don’t understand the need to label an article “worthless” just because you may disagree with some ( or all) of the author’s assertions, Those who commented clearly found it worthy of attention. As someone who doesn’t live i n L.A. I found it interesting and informative. And as a writer, I know the time and thought that goes into such an article.

    • Gilbert Mercier
      Gilbert Mercier February 14, 2010 at 11:49 am

      Thanks Amy. As you noticed, the topic of the article was not the immigration issue but the soaring budget deficit, and addressing the lack of balance in the city budget. Namely questioning the validity of spending so much money on the LAPD.
      But for some people in California, and elsewhere in the country with a large immigrant population such as Arizona or Texas the answer is too often “blame the Mexicans” for all problems and let’s kick out of the country around 12 million people. And this is very much on the political platform of the so called “Tea Party” movement.

  6. GrayRiv February 14, 2010 at 1:13 pm

    Overall, immigration is a huge help to Los Angeles and the state of California and immigration reform would make it more so. That’s because legal immigration is beneficial to immigrants and non-immigrants and they each then contribute more to the output of their employers and the economy.

    Immigrants have much higher rates of workforce participation, higher rates of living in two-parent families with children, much lower rates of welfare use (especially immigrants in the US illegally), much lower rates of crime, and much lower rates of health care usage (especially low-wage immigrants). The myth that they are living tax-free off of the public dole isn’t just a myth, it is the opposite of true.

    If those here illegally where given a chance to get legal, or if we gave them a reasonable chance of coming legally in the first place (or preferably, both), California and LA would reap a serious benefit in taxes, economic activity, productivity, income of residents, and the strength of labor and unions. This is offset by increased eligibility for some US programs (depending on what reform passes) and some increase in health care usage as access to insurance increases. But the taxes more than offset those costs, as recent studies by both USC and UCLA confirm.

    The hold up is that those opposed to immigration reform are opposed to anyone here illegally ever being here legally. That condition — all 10,000,000 plus people must leave — is holding up reform that would lead to a functioning, legal system where the rights and responsibilities for immigrants, employers, and everyone else were clear and enforceable.

    The fantasy of mass expulsion is standing in the way of law and order.

  7. jmb27 February 15, 2010 at 1:59 pm

    Predatory Lending is a major contributor to the economic turmoil we are currently experiencing.

    Here is an example of what I am talking about:
    Scott Veerkamp / Predatory Lending (Franklin Township School Board Member.)

    Please review this information from U.S. Senator Jeff Merkley regarding deceptive lending practices:
    “Steering payments were made to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called Yield Spread Premiums, turned home mortgages into a SCAM.”

    The Center for Responsible Lending says YSP “steals equity from struggling families.”
    1. Scott collected nearly $10,000 on two separate mortgages using YSP and junk fees. 2. This is an average of $5,000 per loan. 3. The median value of the properties was $135,000. 4. Clearly, this type of lending represents a major ripoff for consumers.

  8. Munner February 16, 2010 at 11:10 pm

    We continue to be raped by union welfare recipients with their unrealistic & unsustainable pay, benefits, and pensions. But you don’t hear a word from them i.e.; teachers, police, fireman…. They look after #1!

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