L.A. budget crisis threatens jobs, credit rating

[The Northerner]

Source: Reuters

LOS ANGELES (Reuters) - Los Angeles, the second-largest city in the United States, is confronting a mounting budget deficit that threatens to force thousands of job cuts, deplete its fiscal reserve and further damage its credit rating.

The $212 million budget shortfall, projected to more than double next year, is attributed mainly to plunging tax revenue blamed on the region's sagging economy, falling property values and a 15 percent jobless rate -- one of the highest of any major U.S. city.

"The last time we saw this kind of drop in revenue was the Great Depression," Miguel Santana, the city's chief financial officer, told Reuters. "It speaks to how severe this budget crisis is."

Mayor Antonio Villaraigosa and other senior city officials spoke on Friday with executives at Fitch Ratings, seeking to forestall a further diminution of Los Angeles' credit-worthiness.

The city was downgraded late last year from a top rating of "AAA" to "AA-" as serious budget problems loomed.

Read more: http://www.reuters.com/article/idUSTRE61D2BP20100214

[Flaneur]

1. And the city council just voted to eliminate thousands of private sector jobs...

...by forcing hundreds of medical marijuana dispensaries to close. Each one of them probably has a minimum of five employees.

[truthisfreedom]

2. Way to go.

[Bette Noir]

3. It gets worse.

Since it's hard and unpopular to raise taxes, the city has come up with some real creative ways to increase revenue. Watering your yard after 9 am, or any day except Monday or Thursday, will get you a $125 fine-- that's even though having everybody water at the same time has caused a 900% increase in water main blowouts, so no water is being saved. Any traffic tickets issued in the city are topped with a $100 surcharge, and it's practically impossible to fight them. Writers are charged for business licenses, $100 for typing in the privacy of one's own home.

Life in LA has become very much like living in a Batman movie. Nothing has changed since Raymond Chandler's day.