Budget problems create conflict

Imagine Los Angeles’ public services closed for two days a week — no courts, no libraries, nothing except public safety services and independent businesses. This radical idea to close the city two days a week sounds like a hoax; something that might have originated from a late-night comedy sketch.

Sadly, the only punchline is that our city’s budget crisis is so dire that Mayor Antonio Villaraigosa is proposing such a drastic measure. City Controller Wendy Greuel has projected that at the current rate of spending, the city will run out of money and be in $10 million in debt by May 5 of this year.

The Los Angeles City Council, naturally, was bewildered and outraged at Villaraigosa’s proposal. For one, it would furlough about 22,000 of the city’s employees, violating labor contracts.

What’s worse, the budget issue has devolved into a vicious cycle of finger-pointing that detracts from the city government’s ability to actually craft any actual plans of action, which has left the government at a loss for what to do.

How did this apocalyptical scenario even materialize? Sure, Los Angeles County has one of the worst unemployment rates in the country at 12.5 percent, and public universities have already felt the pinch with tuition increases last year. But closing the entire city except its core functions twice a week seems absurd.

The last straw came Monday, when the Board of Water and Power Commission, which presides over the L.A. Department of Water and Power and usually transfers $220 million to the city’s general fund every year, announced it could not make the transfer.

Sullivan Brown | Daily Trojan

The LADWP didn’t receive adequate funding this year because of the city council’s opposition to Villaraigosa’s previous 12-month rate hike, so the LADWP did not have a surplus from which to transfer the funds. In fact, it has only transferred $143 million, with the remaining $73.5 million currently under contention.

There is heated disagreement between Mayor Villaraigosa and the City Council, who are at odds over how to save the city from running out of funds. Villaraigosa eventually withdrew his initial proposal to close the city — after all, his sole authority cannot push through the measure without the approval of the City Council. Regardless, the DWP has received a lot of heat over the funds.

Former DWP commission President Nick Patsaouras, who is filing a lawsuit against the DWP, claims that the utility has an 8

percent surplus, which is enough to provide the money. “As a taxpayer, I want to compel them, compel the DWP, to honor their commitment,” he said.

Needless to say, to have Los Angeles run out of money would create chaos in a climate already wrought with anxiety. But the problem is that none of the parties is willing to cede any ground: Villaraigosa, who has some control over the DWP, is at a stalemate with the opposing City Council, whose main concern is to keep the city funded.

Employees are not willing to take a cut in their salaries in order to save their city. The city is enveloped in what the mayor calls “the politics of ‘no’” and “the kind of demagoguery you see in the Congress.”

Instead of playing “a crazier and crazier game of chicken,” as Councilman Paul Koretz called it, an immediate solution needs to be drawn out before the funds run out.

Across the globe, a bloody riot broke out in Kyrgyzstan’s capital on Wednesday. It was a riot fueled by bitter feelings toward President Kurmanbek Bakiyev’s policies of brutality and corruption festering in the opposition group. However, this riot was fueled by a dramatic increase in utility rates.

Sounds familiar, but hopefully on a much more intense scale than what the city of Los Angeles would have to face.

Nadine Tan is a sophomore majoring in business administration.  Her column “World Rapport” runs Fridays.

1 reply
  1. Joe
    Joe says:

    I never thought I’d see the day when a race-pandering Democrat mayor of Los Angeles would swallow hard and admit, “We’ve got to stop spending more than we have.” There may be hope for this city and this state yet.

Comments are closed.