Tuesday, February 1, 2011

Bernard Parks Explains The HARD REALITY of L.A. City's Budget Crisis at Today's L.A. Council Meeting (CBS 2 Report)

LOS ANGELES (CBS) — The Los Angeles City Council again put off deciding
whether to resort to additional furloughs, opting Tuesday to cut expenses by $16.1 million but leaving a gap of $50 million to $70 million this fiscal year.

Of that deficit, $20 million to $40 million can be attributed to a projected shortfall in tax revenues. The remaining $28 million was essentially caused by various departments spending beyond their means.

Councilman Bernard Parks said drastic steps will have to be taken, and soon, because delays in leasing the city’s parking garages means the deal will not become profitable until next fiscal year, or several months later than had been expected.

The city’s budget analysts have recommended saving $20 million in the current fiscal year by imposing an additional 10 furlough days on civilian employees already required to take either 16 or 26 unpaid days off.

However, several council members hesitated because the plan would shut down some departments entirely for one or two days each month from February through June.

Officials with the Department of Animal Services warned that additional furloughs could force the Northeast Shelter to close and result in more animals being euthanized.

A report submitted by the City Attorney’s Office said a reduction in prosecutors would allow criminal defendants to avoid conviction.

Parks said the city is running out of choices.

“There is no reserve fund, there is no one to fix it for you,” Parks said. “There is no department (with) money in their bottom drawer. There’s no windfall coming — this is where the rubber meets the road.”

The council cut the deficit by $18.25 million last week and $16.1 million Tuesday, mostly by suspending hiring and forgoing purchases.

It directed departments to report within the next 30 days on how they could reduce costs even further to address not only the $50 million to $70 million deficit this fiscal year, but also the $350 million deficit projected for the next fiscal year, beginning July 1.

Parks said he hopes revenues will pick up, specially from sales taxes from Christmas shopping.

“The only thing that keeps us stable at this time is we have a very viable number of revenue sources and hopefully they don’t all red-line at the same time,” Parks said.

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