L.A. City Council OKs job cuts and unpaid leave
By Phil Willon
10:16 PM PDT, May 18, 2009
Saying Los Angeles’ financial troubles are grave and expected to grow far worse in the years ahead, the City Council on Monday approved widespread layoffs and furloughs for city workers but set aside enough money to back away from a proposal to freeze police hiring.
The severity of the cuts remains in flux, however, as city officials and public employee unions continue to negotiate possible salary and benefit concessions that could save the city more than $230 million.
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Scores of unionized city employees crammed into the council chambers when the budget hearing began at 10 a.m., most pleading with the council to find alternatives to layoffs.
“You’re not just laying people off, you’re shattering lives,” city traffic Officer Gordon McCullough, 53, told the council.
With the rising price of gasoline, food and other everyday expenses, it’s getting tougher and tougher for many employees to get by, McCullough said.
“There are people who are one paycheck away from landing on the streets,” McCullough said. “It’s easy to say, ‘Let’s lay people off.’ It’s hard to work to make government more efficient.”
Councilwoman Wendy Greuel said the cuts approved by the council were difficult because they would affect families and neighborhoods throughout the city, but they were necessary: “If we didn’t make these difficult decisions now, it would be even worse next year.”
Villaraigosa has said he may be forced to lay off up to 3,000 workers if the unions do not agree to major concessions, including a possible salary freeze, buyouts, furloughs or paying higher costs for health and pension benefits.
The L.A. Coalition of Unions, which represents 22,000 city employees, is pushing for an early retirement package that would be offered to workers who are within five years of retirement. Aides to the mayor, however, said that would overburden the city’s underfunded pension systems.
The city’s top budget analyst predicts that L.A. could face a $1-billion budget shortfall in 2010-2011, and one even larger the year after, because of investment losses in the pension systems. By law, the city is obligated to keep the pension systems solvent.
The Los Angeles City Employees’ Retirement System and the Los Angeles Fire and Police Pensions are expected to suffer combined investment losses of 25% in the current budget year and to have flat returns in the next year.
By 2014, the city’s annual contributions to the two pension funds could grow to $2 billion.”
When was the last time anyone saw the private sector employees beg their employers to cut their wages and benefits to save jobs? They must know that the grass is not greener in the private sector or they would not be asking. It is my guess that:
1. They know their benefits far exceed their wages.
2. They are doing better than the private sector.
3. They are more concerned about losing their benefits.
Working in aerospace, we have union line workers which make less than $25/hr that drive $50k cars to work. They max out their matching 401k, insurance, stock options, etc. They work for the benefits. Their spouse has a business that does not provide benefits. It wouldn’t surprise me the most gov’t workers are doing the same.
At least the City of Angeles is waking up to reality. Can the State be far behind? I guess today’s election will be shot heard around the world. OC survived a major bankruptcy, I would expect, although painful, the state could do likewise.
BTW, how many here would have liked to lose only 25% of their 401k in the last year? Note to self: have wife get gov’t job next year as my hedge fund.
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