L.A. Watchdog – Two years ago, on April 9, 2014, the Los Angeles 2020 Commission recommended unanimously that our city create an independent Office of Transparency and Accountability to review and analyze the city’s budget, finances and efficiency.
This recommendation, along with other constructive, easy to implement measures contained in the L.A. 2020 report, A Time for Action, was buried in the bowels of City Hall, never to be heard of again.
Polling numbers indicate declining support for the two November ballot measures — Metro’s half-cent increase in our sales tax to fund mass transit projects (and a few pet projects) plus the half-cent bump to support its 10-year, $1.85 billion homeless initiative.
ll of that would propel our sales tax to 10 percent, one of the highest rates in the country.
City Council President Herb Wesson and Mayor Eric Garcetti have resurrected the four budget-related recommendations of the L.A. 2020 Commission to buy our support.
In addition to the Office of Transparency and Accountability, the city will establish a Commission for Retirement Security to review the status of the city’s two seriously underfunded pension plans and make recommendations on how to “achieve equilibrium on retirement costs by 2020.”
The city will review its overly aggressive investment rate assumption of 7½ percent for its two pension plans with the intention of lowering the rate, over time, to a more realistic 6 percent, as recommended by Warren Buffett, the most successful investor of our times.
Expansion of Pension Spending
As Messrs. Wesson and Garcetti point out, this will require the city to increase its pension contribution by an estimated $400 million a year, a politically difficult decision that they endorse so that we do not burden the next generation of Angelenos with an enormous debt.
Finally, the two leaders will sponsor a “Truth in Budgeting” ordinance. This will mandate the city to develop its annual budget in conjunction with a three-year plan that will allow the city to better understand the long-term implications of its policies.
In announcing these recommendations to increase transparency and to reform financial policies, Mayor Garcetti said these four budget recommendations are an integral part of his “Back to Basics” policy of requiring the city to live within it means. He thanked Mr. Wesson for his hard work in persuading the skeptical leaders of the powerful labor unions that these reforms are in the best long term interest of the city, workers, and public sector unions.
This rant highlights how leaders take us for a bunch of clueless fools who will continue to be bamboozled by their eloquent rhetoric and charming ways into approving massive increases in our taxes without real reform of finances.
These foolish financial follies are characterized by a river of red ink, continuing structural deficits, budget busting labor contracts, lunar cratered streets and broken sidewalks, and $15 billion of unfunded pension liabilities.
These will devour the future of the next generation (or two) of Angelenos.
We have been fooled too many times to be fooled again.
Mr. Humphreville writes LA Watchdog for CityWatchla.com. He is the president of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Mr. Humphreville is the publisher of the Recycler Classifieds — www.recycler.com. He may be reached at lajack@gmail.com.
