The departments getting cut include City Charter-protected services like the Library Department and the Department of Recreation and Parks. They do not include the LAPD and proprietary departments like LAX, the Port of Los Angeles, and the DWP.
To achieve the elusive balanced budget, facing an estimated $450 million deficit in 2010-2011 alone these specific departments including Libraries and Parks are being hit by the Mayor and Council with crippling financial cuts along with the removal of nearly half the people who actually do the jobs.
Some losses of manpower are manageable. There is a tipping point, however, beyond which having no people to do the jobs ultimately leads to no public services, no matter how carefully tasks and efficiencies are manipulated.
The public is on the losing end of these cuts, without a doubt. Services, neighborhoods, and overall quality of life in Los Angeles is forfeit under this plan.
With this kind of devastation, you just gotta ask: does the Mayor and City Council's chosen path of balancing the budget - by decimating public services and workforce - even make sense?
Can the budget actually be balanced on the backs of these specific departments?
The budget crisis is related to the amount of monies available in the infamous General Fund.
Depending on how you choose to follow the dollars, the constituent services departments including Parks and Libraries account for less than 1/3 of the spending from the General Fund. Police and Fire - largely untouched by cuts in the Mayor and Council's plan of action - account for more than 2/3rd.
By way of the plan - and we use the term plan with tongue firmly in cheek - massive cuts are being made to the 1/3rd of the departments that provide that majority of constituent services. Some cuts being made illegally.
Yet the deficit forecast for the General Fund will continue to grow, regardless of how many cuts in this vein City leaders take. This is because the deficit is mainly due to existing pension liabilities: money currently owed and that will continue to be owed to employees at this moment in time. You can lay them off and transfer them to stop the base number from growing, but that liability - the liability that exists right now - isn't directly affected. It has a deficit that remains unfunded.
This is the "budget deficit" in question.
To repeat in the spirit of Dave Ross's News-Read-Real-Slow, this liability - the existing pension liability - is not changed by laying off and transferring employees if they remain on the same pension fund.
Laying off, and transferring employees slows the growth in the base amount of pensions that must then be funded by the City in the future. It also frees up General Fund cash that can be used to pay the pension liability annually.
However, short of Chapter 9 financial reorganization, aka the "B" word, this liability is not going away. Meanwhile, City services are being slashed, slaughtered, and decimated to pay for this liability while the liability itself remains unaddressed and unresolved.
How has the plan worked so far?
Looking at how balancing the budget on the backs of the services department has hit the Department of Recreation and Parks - the stewards of Griffith Park - we get a pretty good idea of how well this approach is addressing the issue. Or not.
The General Fund budget deficits for the past two years is $700 million total ($250 mil 2009, $450 mil 2010)
The hit to the Department of Recreation and Parks looks like this.
- As of March 2010 -
- Total number of Parks: 419 (500 acres of park space and ~50 parks added in the past 5 years)
- Change in Workforce Size: -900, -43% (2100 employees (June 2009), to 1200 (July 2010) )
- Change in Actual funds for Operations: -$62 mil, -35% ($177 mil (June 2009) to $115 mil est (July 2010) )
Here is what the plan as it stands today - without any more cuts but facing a much larger pension liability - will do to the parks in our neighborhood tomorrow.
(assuming $177 budget, City-Charter appropriations and utilities remain constant, plus full pension cost recovery in 2014-15)
Actual funds for Operations 2011-12: -$66 mil, -37% (actual $111 mil)
Actual funds for Operations 2012-13: -$70 mil, -40% (actual $107 mil)
Actual funds for Operations 2013-14: -$74 mil, -42% (actual $103 mil)
Actual funds for Operations 2013-14: -$78 mil, -45% (actual $99 mil)
Actual funds for Operations 2014-15: -$94 mil, -53% (actual $83 mil)
That is what the plan as it stands today will do to the parks in your neighborhood tomorrow.
But wait! Without the financial miracle the City is waiting for, the plan must address the future pension liabilities, too. Future General Fund budget deficits for the next two years total $1.7 billion ($700 mil 2011, $1 bil 2012)
With a future pension liability a full 59% larger facing the City in the next two years, how can the plan find any more to cut - both legally and illegally - from the Department of Recreation and Parks and other constituent service departments to balance these budgets?
Hardly looks possible, 'cause it ain't possible.
$omething else ha$ to give$$$$$... a lot.