The State of the LA … According to Eric

LA WATCHDOG--Mayor Eric Garcetti’s 60 minute, 8,000 word State of the City address was long on the City’s accomplishments, ranging from being selected to host the 2028 Olympics, the expansion of our subway system, the authorization of the $5 billion people mover system at LAX, lower crime rates, the taking of guns off our streets, the paving of 11,000 miles of streets, and the creation of over 150,000 jobs. 


Garcetti also zeroed in on the homeless crisis, calling it the “greatest moral and humanitarian crisis of our time.” He pledged to end homelessness within a decade by focusing the resources of City and the County on this community.  These efforts will be funded by the $1.2 billion bond measure (Measure HHH) approved by the voters of the City and the $3.5 billion over the next ten years from the quarter of cent increase in the County’s sales tax (Measure H).  

Unfortunately, the City’s General Fund will not be a consistent source of cash because money for the homeless and other services such as our streets will be crowded out by the need to fund ever increasing salaries and pension contributions. 

But this aspirational speech was short on details, especially since there was no discussion of the City’s Structural Deficit, the deferred maintenance budget estimated to be north of $10 billion, the City’s unfunded pension liability of more than $15 billion, and the inadequacy of its Reserve Fund. 

Garcetti once again failed to follow up on his Back to Basic pledge to have the City “Live Within Its Financial Means.” 

There was no discussion about reforming the City’s finances, despite the common sense, easy to implement recommendations of the LA 2020 Commission and the Neighborhood Council Budget Advocates. 

These recommendations included, among others, establishing an independent Office of Transparency and Accountability to oversee the City’s finances, limiting the ability to enter into budget busting labor agreements, the development of plan to repair and maintain our streets, including the one third of our streets that are failed, the creation and implementation of a long range financial plan, and a comprehensive review of the City’s two underfunded pension plans.  

Underlying the failure of Garcetti and the City Council to follow up on these budget recommendations that will allow Angelenos to gain a better understanding of how their hard earned money is being spent is the fear of our politicians that increased transparency will interfere with their way of doing business, especially when it comes to entering into budget busting labor contracts with the campaign funding leaders of the City’s public unions or giveaways to their developer cronies. 

Rather, it seems as if the City’s solution to problems is for our politicians to pontificate about a specific problem, introduce a council motion, demand a study, blow more hot air in our faces, pass an ordinance, and then throw money and bodies at the problem without any concern about the effective management of the new program. 

This certainly applies to the agency formed by the City and County that is responsible for overseeing the homeless crisis, the Los Angeles Homeless Service Authority.  It is an organizational disaster area.  And at the City level, the politically appointed HHH Oversight Committee is bogged down by organizational paralysis as the City’s departments are unwilling to come out of their silos and consider new and more effective ways of attacking the homeless crisis.  

At the same time, the City’s cost for permanent supportive housing is estimated to be in the range of $400 to $500,000 a unit, an astronomical price given that the Aids Healthcare Foundation is creating new units for $100,000. 

On Friday, Mayor Garcetti will present his budget for the upcoming fiscal year to the City Council for its review, analysis, and approval.  We will then be able to get a better understanding of the City’s finances, but it may take some time to understand all the budget shenanigans and sleights of hand.  

One thing for certain is that Garcetti will not honor his Back to Basics pledge that the City will “Live Within Its Financial Means.”  Maybe this duplicity makes him a good candidate to be our next President. 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council.  He is a Neighborhood Council Budget Advocate.  He can be reached at:  [email protected].)