Tuesday, February 16, 2010

Prosperity and sustainability: No easy budget choices

Dan Walters, the respected and cranky California policy and politics columnist, reflects today on the dire financial crisis in Los Angeles. Our state's largest city is running out of cash -- and out of options to solve the problems because everyone is saying "no."

Walters quotes L.A. Mayor Antonio Villaraigosa: "There just aren't unlimited options here. We can't continue to say no to everything. We can't say no to layoffs, no to furloughs, no to department eliminations. … The fact is, we can't sustain this business model."

Walters concludes his column with this warning for elected officials throughout California: "Los Angeles' inability, thus far, to perform the fiscal surgery that the situation demands indicates that were the two-thirds vote requirement on the state budget to be repealed, as it should be, the Legislature's Democrats would find themselves stuck with solving the state budget deficit by themselves, unable to blame Republicans for their dilemma. Los Angeles is, therefore, a very accurate harbinger for the Capitol, whose politicians still haven't accepted the reality that their business model is just as unsustainable."

"Fiscal surgery," of course, is a taking either a scalpel or a meat ax to government services and capacity -- which directly affects community constituencies and/or unionized jobs. In today's deeply polarized politics, "just say no" is the favorite slogan of left, right and center.

For example, Barbara Maynard, spokeswoman for the Coalition of L.A. City Unions, opposed Villaraigosa's lay-off plan. "The last thing Los Angeles or any city needs is to have more people on the unemployment line," she said. Citizens and businesses would howl over a tax or fee increase. So without Council action, Los Angeles drifts toward the same kind of fiscal meltdown we've seen in Sacramento.

It's understandable that working people are furious with being saddled with lay-offs and pay cuts because of the international economic meltdown. And it is equally understandable why voters reject service cuts or tax increases at a time when so many of them face austerity at home and work. The result: California is looking more and more like Greece -- the original birthplace of democracy which is teetering on default, threatening to bring down the European currency and send international markets back into a tailspin.

Is democracy capable of righting itself? Can voters and our society's organized interests find compromise or consensus so we can work our way through this mess?

The answer is yes, but that means softening the shouts of "NO!" that greet every option offered up. Ventura has taken the steps needed to spend within our means, but the worsening fiscal situation means we have further to go. The Council has laid out the five options, none of them ideal:
  • Further reductions in lower priority programs and expenses
  • Continuation of employee compensation reductions
  • “Re-inventing” services to reduce costs
  • “Muddling through” with project delays, funding shifts and other short-term measures that are not sustainable over the long run
  • Promote additional revenue through economic development or other approaches
"Compromise" would probably require a deal where everyone accepts a little of all these -- which is probably why compromise generally gets a bad name. "Consensus" would involve an open and fair community discussion where people listen to each other and forge a plan that involves the broadest area of agreement. The alternative to compromise or consensus is stalemate -- what's happening in Sacramento and Los Angeles.

It has not been easy for Ventura to make the tough choices -- and the choices ahead are even tougher. The "easiest" reductions are behind us -- reductions in lower priority services, temporary pay cuts and belt tightening across the board. But if we are to have a "sustainable business plan" we must stay the course of not spending money we don't have -- and put our efforts into building a sustainable prosperity that can replenish our public and private resources for the future.

3 comments:

Burris said...

Some ideas to consider and combine w/ extant BFO concepts developed last year:

1) divest of Fire, Police, Utilities and/or Parks to sep. districts and the County.

2) Focus efforts on Community Development - smart growth building, getting those projects on Thompson and Main (infill) done.

3) Reduce Harrison trash services to 1x week and create citizen volunteer city clean-up committee to do work normally performed by Harrison and Public Works.

4) Shift event and business generation burden to DVO and other organizations.

5) Run more offices, centers, etc. w/ skilled volunteers, student interns, part-timers. Allow Venturans to pick up slack when funds to pay for FT staff are not available.

Venturans ought to take control of their own city if concern is so grave over high staff pay and limited services. But we can't have it both ways. You get what you pay for. When you cut staff and/or lower salaries, morale, motivation and quality are all sacrificed. But we do have very talented and exceptional residents who could help by doing gratis work in all areas, from Community Services to Administration. We already have terrific volunteers in Finance and Technology and other departments.

The problems w/ lay-offs is, as Mayor Fulton explained to staff, difficult because once you go lower than 570 people, service is drastically affected. Also, what is the cost-benefit trade-of of cutting more staff into the unemployment pool because they too will be receiving state benefits, costing tax payers and not spending locally.

Kristofer Young, DC said...

Rick,

Yes, to your call for less "no".

Like Burris, I too am attracted to the idea of residents volunteering to cover needed services. Seems like a great idea, but can it really work?

Anonymous said...

Community pride is very important in picking up the slack. In certain countries, families and community take care of each other. But we have come to accustomed that government does every for us. We have become lazy and expect more without paying more. Maybe it is time to say no to all of these services and provide the essentials of a community and do what everyone else is doing in this economy spend less. But politicians in California won’t do that.