How L.A. ignored its fiscal mess

If you're still confused about how the city's fiscal condition could have deteriorated so badly, a couple of statistics provide a good place to start. Between 2000 and 20009, L.A.'s 35,000-member workforce increased by at least 3,000. During that same time, yearly pension contributions more than tripled, to $723 million. They're among the interesting bits assembled by the LAT's Phil Willon in a story over the weekend. The current DWP standoff with the city has set in motion a potential crisis, but Willon reports that the warning signs have been out there for at least two or three years. Elected officials, starting with Mayor Antonio Villaraigosa and many members of the city council, just chose to ignore them.

When the effects of the failing economy surfaced in late 2007, Mayor Antonio Villaraigosa and the City Council approved significant raises for union workers and pressed ahead with a police force expansion even as they talked openly of a need for cutbacks and threatened layoffs. "It's a head-scratcher," said Jack Kyser, a Los Angeles County Economic Development Corp. economist. "If you know that tough times are coming, you should be ultra-cautious. You've had ongoing warnings about the magnitude of the downturn and they haven't been listening."

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City Administrative Officer Miguel Santana said officials for years have relied on finding one-time pots of money to cover up to $200-million annual budget gaps created by a growing workforce, expanded services and generous pay packages. "IIf you look in the context of our $4-billion budget, this year's drop in revenue is not unsurmountable -- $184 million," Santana, Los Angeles' top financial analyst, said in a March interview. "But it is significant if you're living by the skin of your teeth." To help cover the city's bills, elected leaders have reached beyond staple tax revenue collections; liquidating city property, increasing parking meter and trash fees, and diverting revenue from the Department of Water and Power.

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Former City Controller Laura Chick said officials waited until things were so bad that they had no choice but to act. "That's an insane way of governing. We don't have political leadership today that is strong, courageous and thoughtful enough to look into the future."What makes things worse is that the mayor and council members had been put on notice, Chick said. As city controller, she warned in 2007 that the reserve fund was depleted. That same year, then-City Administrative Officer Karen Sisson projected a $215-million shortfall. Council member Bernard C. Parks urged colleagues to prepare layoff lists because of a potential "drastic reduction" in revenues. Despite those warnings, the mayor and council signed off on raises for the Coalition of L.A. City Unions, which represents 22,000 civilian employees.

To be fair, the most efficiently run government would still be having trouble these days because there's not just enough revenue coming in, the result of slower business, plummeting home values and so forth. But in the case of L.A., it wasn't just the recession - it was gross ineptitude and political pandering.