Below, please find a note Mike sent neighbors on December 6, 2020:
With the pandemic causing our regional economy to collapse, the City is in a severe and unprecedented crisis. In the next few days, the City Council is going to be looking at the potential for painful layoffs and deep service cuts.
There’s a lot of noise and misinformation spreading online, so I wanted to layout where we are, how we got here, what the options are, and answer some other questions about what the impacts might mean for you and your neighbors.
Where We Are
On Friday, City budget analysts issued a report showing that city revenues continue to plummet and that, halfway through the fiscal year, the City is facing a devastating $675 million hole in the budget. In addition to prior cuts and already approved furlough days for many civilian employees, budget analysts are recommending a series of drastic cuts, including potentially 1,894 layoffs. They are also recommending that the City delay equipment purchases, cancel capital projects, do short-term borrowing, and exhaust most of its reserves and rainy day funds.
The Budget & Finance Committee will be discussing this Monday, and the full City Council on Tuesday.
How Did We Get Here?
With the pandemic shutting down huge segments of the economy, City revenues have plummeted. The report ominously notes that “every revenue source has been impacted, and revenues tied to tourism, services, parking, and retail are at risk of further decline.”
This news comes as a public health crisis and widespread economic insecurity mean the needs and demands for services are greater than ever. And personnel costs have risen, fueled in large part by raises (approved prior to the pandemic) for many City employees.
Earlier this year, the City Council made significant cuts in many departments’ budgets, and authorized unpaid furlough days for many civilian workers. (Unions representing civilian employees objected, and then negotiated a package of different concessions, which reduced the number of furlough days, deferred sick pay, and significantly reduced staffing in many departments.)
Yet even with the benefit of some emergency federal funds earlier this year, those actions haven’t been nearly enough to close the budget gap. With a new round of Safer at Home orders going into effect and more business activity being curtailed, the City’s financial situation will likely get even worse.
What Are Our Options?
With the worsening situation, the significant cuts various departments made earlier this year are not enough. To deal with this crisis, the Mayor and the City Council asked the general managers of every department to prepare for a cut of 3%, and explain how they could do that. That was the basis for Friday’s report from our budget analyst.
Making budget cuts is always difficult and painful. We are nearly halfway through the fiscal year, which means making cuts is even harder. The impact of any cuts we make will be more severe, since they will be spread out over a much shorter period of time.
The majority of the City’s expenses are personnel costs. That means we eventually and ultimately face a choice about layoffs and furloughs — which translate into service cuts — or changes in salaries and compensation. They are all difficult conversations, and any change in salaries requires reopening collective-bargaining agreements, with the consent of our labor partners.
Many of our civilian employees have made salary and benefit concessions, and no doubt will be asked to make more, so I have been particularly focused on the need for the union representing our police officers (LAPPL) to discuss postponing their contractually-approved raises until we get through this crisis. It’s particularly important since the police union is our largest bargaining unit, and LAPD represents 50% of the City’s discretionary spending. Unfortunately, the police union has repeatedly refused to even discuss postponing raises, which narrows the budget options considerably.
Most of our city departments were able to come up with proposals to cut their budgets by 3% without restoring to layoffs. With most of its spending being on salaries, the LAPD was unable to do that, so budget analysts have recommended layoffs of 951 officers and 728 civilians. This will have a significant impact on neighborhood patrols, response times, investigations, crime scene processing, and DNA analysis.
The bottom line is that we can avoid layoffs if we defer raises. That’s why we need the public to encourage the police union to postpone raises. There is a lot of public debate about how to provide for public safety in our neighborhoods. If you are upset about existing or potential impacts on neighborhood patrols, we need the police union to come to the bargaining table.
But Hasn’t the LAPD Already Had a Budget Cut?
With crime on the rise — not just in Los Angeles, but in most large cities — some people want to claim that the cause is City officials defunding LAPD, effectively cutting patrols. That claim is false. The City has not defunded the LAPD.
Last year, the budget for the police department was $1.733 billion. This year, the budget for the police department is $1.721 billion. That’s a reduction of less than 1%. Hardly a defunding or a drastic cut. That cut is actually significantly smaller than a lot of other departments. By comparison, the agency helping renters facing eviction took a 10% cut, as did the Emergency Management Department. The agency that feeds seniors took a 7% cut, and so did the agency helping small businesses. The department that fixes streets took a 20% cut. (FYI – I voluntarily took a 10% pay cut several months ago.)
Some people like to claim that the City Council cut $150 million from the LAPD budget. That isn’t quite true. The proposed budget would have given LAPD a sizable budget increase. Instead of increasing the LAPD budget while cutting other programs, the City Council allocated $150 million elsewhere, to minimize cuts in services and to invest in disadvantaged communities. The difference in the LAPD budget year to year was $12 million, or 0.7%.
Even though LAPD got nearly the same amount of money it did last year, the department has cut neighborhood patrols. That’s because the department has to pay for the union’s raises. In effect, taxpayers are getting less for the same amount of money.
The LAPPL contends reductions in patrols have resulted in a rise in crime. There are likely many factors contributing to crime, and if the reduction in patrols in one of them, those reductions are the result of the union refusing to delay raises.
But Can’t We Cut the Budget Without Any Impact At All On the Police Department?
Some people argue we should cut an historic sum from the budget without even looking at the LAPD budget. That’s what the city did a decade ago, when it shuttered LAFD engine companies and drastically cut services. What many people do not realize is that the LAPD accounts for 50% of the City’s discretionary spending. That means that half the spending we can examine to address this crisis is the LAPD budget.
If we take LAPD’s spending off the table, that means even deeper cuts in programs that help renters, working families, seniors, kids, and small businesses. We would be cutting services to our most vulnerable neighbors in the middle of a public health crisis and economic collapse. And we would be doing so not to save police patrols — but to save police raises.
What Else Is on the Chopping Block?
Even with shared sacrifice from all departments, including the LAPD, the fiscal picture is grim. The recent report suggests cuts in fire department staffing, emergency management, and the agencies helping seniors, renters, and small businesses. It recommends spending less on traffic signals, street resurfacing and weed abatement. It recommends cuts that will mean a delay in street lighting projects, sidewalk repair, and other capital improvements.
Of the $675 million deficit, less than $100 million comes from layoffs, furlough, or salary adjustments. The report recommends that $259 million come from our reserves, $150 million from increased debt, $69 million from COVID reimbursements, and $103 million from other departmental budget cuts.
What Are the Next Steps?
There is still potential for additional relief from Washington. News reports suggest there is hope that Congress might approve up to $130 billion in relief to cities, as well as offer aid to individuals and small businesses. If approved, that welcome development would spare us some of the pain. But we don’t know how much money it will be, and when it will arrive, so we need to prepare and make some tough choices.
This report from our budget analyst will be in our Budget & Finance Committee Monday, and in full City Council on Tuesday. I will be fighting to prevent layoffs and some of the most painful service cuts, including to the Fire Department and to our response to emergencies and natural disasters.
This is a difficult moment. But Los Angeles has weathered crises before, and we will do it again. We are a tough town, with strong, resilient, and determined people. We will find a way forward — together.
Councilmember, 11th District