NEW: Read the Mayor’s 09 Budget Summary Here

Shared Responsibility and Sacrifice:
Saving Jobs and Protecting Services

Preparing this year’s budget in the midst of a severe national recession presented many challenges and tough choices. Rising unemployment, a high foreclosure rate and the credit crisis have hit Los Angeles just as hard as they have hit families and industries across our country.

The City of Los Angeles provides vital public services, those closest to home. And the City charter requires that the annual budget be balanced. So we face a simple but stark choice in closing an estimated $530 million budget deficit: deeply slash municipal services at the time when families and businesses need them most, while pushing thousands of city employees into unemployment? Or seek fresh ways to live within our means?

The choice is clear. These extraordinary circumstances demand a fresh approach, shared responsibility and shared sacrifice, and the willingness to make lasting changes that close the gap today and lay the groundwork for a secure tomorrow. Therefore, my proposed FY2009-10 City Budget closes the deficit in ways that minimize layoffs and keep vital services intact.

I know that shared responsibility and shared sacrifice is already at work in the homes and businesses across Los Angeles. Working families are stretching and cutting. Employees in the private sector are working fewer hours or taking pay reductions to maintain their jobs and the jobs of their coworkers. Families are reaching out and taking in their relatives in need. These are difficult choices, but the sense of shared responsibility and shared sacrifice is the only way to weather this economic crisis together, and to emerge stronger when we recover.

Our City’s challenges are similar, as is our obligation to weather this crisis with shared responsibility and shared sacrifice. Some of the proposed solutions are as follows:

* Most city departments have been required to cover next year’s increased costs without additional funding. To achieve this, my budget eliminates more than 1,000 vacant positions, and trims less essential programs and services.
* To reduce overhead and concentrate scarce resources, I propose to consolidate several smaller departments.
* The City’s vehicle fleet has been reduced and the replacement cycles for office equipment have been extended.
* Contracts have been renegotiated or in some cases discontinued.
* We are moving forward with a series of responsible public-private partnerships and advertising opportunities which could generate hundreds of millions in revenue over the next several years.

These solutions alone will not balance the budget. In total, if no other action is taken, the remaining deficit would require the equivalent of 2,800 layoffs this year alone. I have already asked the Personnel Department to begin the process for approximately 400 of those layoffs. But layoffs of this magnitude and the service cuts they represent are, in my view, simply unacceptable.

I therefore have proposed more than $200 million in savings to be achieved through ongoing negotiations with city employees and their union representatives. My proposed budget anticipates these savings from every department, including the police and fire departments. And my proposal includes equivalent cuts to the budgets of the City Council, City Controller, City Attorney and Office of the Mayor, including a cut to my own salary.

The full menu of options we can pursue in partnership with city employees and their union representatives to save jobs and maintain services are listed in Exhibit H of my FY2009-10 proposed City Budget, and include the following:

* If every employee took off just one unpaid hour per week, we could save $52 million and prevent more than 580 layoffs
* If each employee contributed just 2% more to our retirement benefits, we could save $63 million and prevent more than 700 layoffs.
* By simply deferring automatic pay raises, we could save $117 million and prevent 1,300 layoffs.

I know these options aren’t easy. Overcoming these challenges will demand patience, focus, collaboration, and creativity. But there are critical city services and thousands of jobs at stake. During this time of crisis, it is up to all of us to think of the greater good, see the bigger picture, and take action to protect jobs and preserve vital services when our families need them most. If we work together as a city, I KNOW we will weather this storm, find a better way forward, and lay the foundation for a brighter future.

Very truly yours,

Antonio R. Villaraigosa