Facing a budget deficit of more than $200 million, Los Angeles city officials are being advised by City Controller Wendy Greuel to focus more on government efficiency and realistic revenue projections.
In a recent article in the Los Angeles Daily News, Ms. Greuel wrote: "We can't keep treating taxpayer funds like Monopoly money. We need an honest accounting of where we are today and where we want to be in five years. To avoid having to make draconian midyear cuts, the council and mayor should use the most conservative revenue projections possible in creating next year's budget."
To fix the city's budget, Ms. Greuel said the city needs to identify the essential government services that the city believes are its top priority, and then shift resources to these services. She also advised officials to avoid budgeting gimmicks and to plan for the long term. She noted that the city often has relied on faulty revenue estimates or one-time accounting tricks to balance the budget.
Ms. Gruel also said the city needs a strong reserve fund, which demonstrates to bond rating agencies that the city is fiscally strong.
One of Ms. Greuel's final recommendations is for the city to engage in "honest deliberation" of the city's financial situation. "If no changes are made, in the next five years nearly half of the city's general fund will go toward paying pensions," she said. "This is unsustainable. While we must maintain the promises that have been made to current and former employees, we must work together to make structural change. Doing nothing is simply not an option." (Source: The Los Angeles Daily News, April 29.)
Cal-TaxReports, May 3, 2010
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