L.A.'s saving grace: It's not Detroit

Well, like, duh. Still, the distinction is worth making on the day that Detroit became the largest American city ever to file for Chapter 9 bankruptcy. L.A. certainly has its fiscal problems (despite what some at City Hall would have you believe), but it's nowhere near financial collapse. If anything, its outlook has improved somewhat, thanks mainly to a better economy. The basic difference between the two cities is that L.A., for all its challenges, remains an extraordinarily diverse economy that's rich in resources - from a massive tax base, to the nation's biggest port complex, to the sixth-busiest airport in the world. Since 2000, its population has risen 4.4 percent; Detroit's population has plummeted 26 percent. L.A.'s unemployment rate is stubbornly high at 10.2 percent, but Detroit is at 18.6 percent - and fewer than half of the city's residents over the age of 16 are working. Per capita personal income in L.A. County (I don't have city figures) is $42,564; Detroit is at $15,261. Crime in L.A. has fallen significantly, while Detroit has the highest crime rate of any major American city (the average response time for an emergency call is 58 minutes). These two cities might as well be on different planets. Except for one thing: L.A., like Detroit, has a monster pension shortfall. We're talking about a $9.4 billion unfunded liability, which basically means that if everything were cashed out tomorrow its assets would not cover its obligations. Good for us that everything is not being cashed out - that pension obligations stretch out over decades. Still, the city is obligated to cover pension costs each year. The result is that an increasing portion of the budget pie - money that should be going towards operating basic city services - is instead going towards pensions (California Common Sense laid out the problem in a report earlier this year). That's not a Detroit-like mess, but it's messy enough.