Lisa Simpson
Jun 24,2010
In: Foreclosure

Los Angeles and Foreclosures

In decades such deep slices had never been carved out the budget as the ones announced by the Mayor of Los Angeles recently. The deficit is a staggering $485 million. It will require downsizing to levels the city has not experienced since the last thirty years. The step would fill in the gap for the fiscal year that kicks off from next July. There will be job cuts matched with increased revenue collection.

Los Angeles is USA’s second largest city. The deficit is said to be because of falling revenue due to the collapsing economy, tumbling property prices, wave upon wave of foreclosures and unemployment running into double digits.

In early April the credit agency gave lower grades to the bond ratings. The comptroller of the city gave the warning that there was the risk of the city running out of dollars in cash.

Mayor Villaraigosa said, “This is a tough time for everyone right now in Los Angeles. We are experiencing an historic economic collapse.” He was speaking while presenting the most severe budget in his tenure of five years. The details of the budget for the fiscal year 2010-2011 ($4.34 billion) were disclosed to reporters by the officials of the city prior to the formal presentation of it.

There would be the permanent erasing of 3,546 jobs calculating to about 10% of those engaged in the public posts. Since the late 70’s such drastic cuts have never been made. Through layoffs 750 posts would be eliminated. The others would be teased out through retirement offers, transfers to self-supporting agencies of the city or attrition. The police force however would not come under the hiring freeze that would be imposed on other departments but restrictions on overtime would be imposed. The latter had already started to be effective earlier this year. This would continue.

An increase in revenue collection and fees promises a modest income. It is expected to yield an extra $154 million towards bridging the shortfall.

One month unpaid leave would be imposed on all employees about to get a cost-of-living adjustment as the labour contract with the city. This will save an extra $63 million.

$39 million would be saved from freezing capital expenditures and there would be a gain of $53 million for a one time increase in parking income.

Villaraigosa admitted that the suggestions were painful. He appealed to the labour unions that represented 98% of the work force to agree to the unavoidable suggestions.

Share and Enjoy: