Mayor Antonio Villaraigosa and former Mayor Richard Riordan went to war this week over the city's fiscal future. In the Wall Street Journal, Riordan predicted the city will go bankrupt by 2014, and charged his successor with fecklessness in the face of a crisis.
One of Riordan's claims was that city staffing levels rose by 5,000 employees during Villaraigosa's first term. Villaraigosa's team shot back, saying that staffing levels have dropped 9% since Villaraigosa took office.
So who's right?
Both have some claim to the truth, and neither tells the full picture. But Riordan's numbers are better, if only because they reflect past reality rather than future plans.
Riordan's figure — which we also used in a piece in March — comes from the controller's annual financial audit, which shows that total city staffing (including the proprietary departments: the airport, the harbor and the strip club-goers at the DWP) rose by 4,832 positions during Villaraigosa's first term.
Villaraigosa's team is using a more narrow figure — the authorized staffing level in the city's general fund. There's a case for excluding the proprietary departments, because the fiscal crisis is in the general fund. You could also argue that the general fund and the proprietaries are connected because employees are being shifted from one to the other, and so you should use the larger figure.
But if you choose to focus only on the general fund, the best metric to use is “filled positions.” That figure shows an increase of 2,660 positions from the time Villaraigosa took office until its peak in early 2008. Since then there has been a drop of 1500 positions, but the figure is still — at last count — 1100 employees above the level when Villaraigosa took office.
Villaraigosa's team is using the proposed staffing level in his budget — which includes eliminating 3500 mostly vacant positions — to make the numbers look better. Since it's not yet clear what the final budget will look like, it's probably not a good idea to use that figure.
To Riordan's broader point, that the city will go bankrupt by 2014, it bears mentioning that L.A. is hardly alone in facing daunting pension obligations. If the city does go bankrupt, you'd have to expect that a lot of other cities would default as well.
In the whole history of California, only two cities (Vallejo and Desert Hot Springs) have gone bankrupt, and neither is even close to the size or the tax base of L.A. The past is not always the best guide to the future, and sometimes entire industries go bankrupt all at once (think GM and Chrysler, or the newspaper business).
But those cities that have gone bankrupt have not been able to wipe away their pension obligations, so it's not clear what the upside would be. Most often, cities that get in deep financial trouble — Gardena, San Diego and South Gate come to mind — find a way to dig out that does not involve bankruptcy.
And L.A. still has a ways to go before things get that bad.
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