For five years a chorus of voices has been predicting bankruptcy for Los Angeles, while often calling for deeper cuts to city employee pensions. Today, however, Mayor Antonio Villaraigosa proposed a budget for Fiscal Year 2013-2014 that includes a one-time surplus of $119 million. While some of that surplus would rely on additional pay and benefit reductions for city workers, even without such cuts the city would have a projected surplus of close to $100 million.
“It’s better than seeing the light at the end of the tunnel – we’re almost out of the tunnel!” Matt Szabo, Mayor Villaraigosa’s deputy chief of staff, told Frying Pan News in an interview last week. Szabo discussed the city’s financial picture and said that dire financial warnings have been largely overblown.
“One of the issues that’s highly irritating is the ease with which some people have thrown around the bankruptcy term,” Szabo said.
After several years of swimming in red ink, the city of Los Angeles is now projecting a $119 million surplus for Fiscal Year 2013-2014, according to city documents presented at a news conference today presided over by Mayor Antonio Villaraigosa. (See Page 3 of the mayor’s Budget Presentation.)
City Administrative Officer Miguel Santana and other officials also attended the media event at City Hall.
The surplus is dependent on the city receiving certain one-time revenues, much of them due from the state and federal governments.
Nevertheless, this disclosure dramatically rebuffs a steady stream of predictions, made by an array of officials, mayoral candidates and commentators, that L.A. faces the possibility of bankruptcy. Such predictions have invariably been accompanied by calls to reduce the pension benefits of city employees.
Later this morning Frying Pan News will post investigative reporter Gary Cohn’s analysis of what has produced the surplus – and of the motivations behind predictions of the city’s insolvency.