Sep 25, 2008 11:06 am US/Pacific
Villaraigosa: L.A. Faces $400M Budget Deficit
LOS ANGELES
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Mayor Antonio Villaraigosa said Thursday that the city is facing a $400 million budget deficit.
AP
A decline in revenue and state funding, as well as the country's current financial crisis, could mean a $400 million budget deficit for the city of Los Angeles in the next fiscal year, Mayor Antonio Villaraigosa warned Thursday.
Los Angeles had a similar deficit going into the current fiscal year that was made up by having city workers take unpaid days off work and pay more for health insurance, and increasing fees for some city services.
"There's no question we're going to be lower in revenues," Villaraigosa told business leaders gathered at City Hall for Access. L.A., sponsored by the Los Angeles Area Chamber of Commerce.
"When I got elected ... I didn't talk a whole lot early on about being a fiscally conservative man. When you become mayor, you've got to sign a check on the other side -- the side that you're not used to signing -- and you get a little more conscious of these things."
A multimillion-dollar deficit would force city leaders to consider cuts to core city services like public safety, Villaraigosa said.
This year's budget calls for $7.1 billion in spending.
That point was reiterated by City Councilwoman Wendy Greuel, who said the city will have to "go back to the basics."
"What is it that the city of Los Angeles is suppose to do?" Gruel asked. "All these other things that we add on, and each year we don't look at zero-base budgeting that says `should we be doing these things?' What is it that the people of the city want us to do?"
It is too soon to know how the federal government's proposed $700 billion bailout for financial firms will affect the city, the mayor said.
As for the state budget, Villaraigosa expressed concern for the future.
"The Legislature and governor signed a budget that essentially deferred the pain to next year," Villaraigosa said.
"What they did was loan against the future and while, thank God, they didn't raid local government to the extent that they've done in the past when they've had these kinds of crises, clearly what they've done is just deferred the fight to another time."
(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
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