Budget woes could spur L.A. to eliminate vacant positions

For more than a year, Los Angeles’ political leaders have voiced alarm over the large number of vacant positions in city government, saying the situation has seriously hampered their ability to provide services to their constituents.

At one point, with the labor shortage affecting about a fifth of the city’s positions, some on the City Council began exploring the idea of providing hiring bonuses to every new employee.

Now, a looming budget shortfall, one fueled in large part by new raises for public employees, could force council members to do an abrupt U-turn, slowing down hiring at many city agencies. In a seven-page report issued last week, City Administrative Officer Matt Szabo also recommended that the city prepare a plan to eliminate all of the city’s unfilled “non-critical” positions.

Szabo, the city’s top financial analyst, declined to say how many vacant positions would need to be cut from the budget. He said the city’s general fund budget, which pays for basic services, currently has more than 2,100 unfilled civilian positions — both critical and non-critical.

In his report, Szabo attributed the ongoing budget woes, in part, to lower-than-expected tax revenues in the city’s general fund — $158 million less than projected for the current budget year. He also pointed to increased costs from two new salary agreements: one with rank-and-file LAPD officers, the other with civilian employees represented by the Coalition of L.A City Unions.

“The collective fiscal impacts of a revenue shortfall, overspending, and the ongoing risk of an economic downturn require the city to take immediate actions to curtail spending,” he said in his report.

The coalition agreement, which would provide seven raises over the next five years, has not yet been approved by council members. If they sign off on that deal, and others like it planned for next year, the financial gap could grow to as much as $400 million in the 2024-25 budget, according to Szabo’s report.

“The additional unbudgeted expenditures tied to the coalition will likely be more than what many departments can absorb,” he wrote.

Under the proposal, public safety positions would be deemed critical, with the Police Department, Fire Department and Bureau of Sanitation kept largely or entirely off limits. Positions dealing with building inspections, library services, the airport, harbor and Department of Water and Power also would be exempted due to their various sources of funding.

The push to shrink the workforce could, on the other hand, affect agencies that handle city planning, park maintenance, engineering, upkeep of city buildings and youth development, among others, Szabo said.

The City Council’s budget committee is scheduled to take up Szabo’s recommendations on Wednesday, with more discussion planned at Friday’s council meeting.

So far, the proposal is facing some pushback.

Councilmember Hugo Soto-Martínez, who sits on the city’s personnel committee, disagreed with the idea that certain positions should be spared, arguing that each city agency should be treated the same. That, he said, means the council must look seriously at eliminating about 300 police officer positions that are currently vacant.

Soto-Martínez, in an interview, said his constituents have a much different view on which services are critical and which are not. He also argued that the proposed job cuts could have been avoided had the council rejected a package of LAPD raises last summer.

“It’s why I voted no,” he said. “I said, ‘If we give these exorbitant raises, every other bargaining unit is going to ask for the same thing.’ And that’s exactly what is happening.”

Mayor Karen Bass negotiated the police contract last summer, arguing that cost-of-living increases and higher starting salaries would help with hiring at a department that now has fewer than 9,000 officers — a drop of about 1,000 over the past five years. Three council members — Nithya Raman, Eunisses Hernandez and Soto-Martínez — voted no, calling the deal financially irresponsible.

Szabo’s latest budget report reflects the seesaw nature of the city’s hiring decisions in recent years. In 2020, faced with a budget crisis sparked by COVID-19 pandemic closures, the council agreed to provide about 1,300 workers up to $80,000 to retire.

The following year, the city received a windfall, with the federal government delivering more than $1.2 billion in COVID-19 rescue funds. Tax revenue rebounded in the months that followed. By 2022, city agencies were starting to find that rebuilding the city workforce was a difficult task.

Last year, officials in the city’s personnel department reported that nearly 1 in 5 jobs were unfilled, with high vacancy rates in agencies that provide street lighting, trash removal, animal services, city planning and many other services. City Controller Kenneth Mejia, in a separate report, put the number at around 1 in 6.

Mejia, in a statement issued Tuesday, responded to Szabo’s report by urging city leaders to develop a five-year strategic plan to address its troubled finances.

“Without a long-term approach to putting our fiscal house in order, short-term decisions will doom Los Angeles to an inexorable decline in public services, undermining our quality of life and the economic prospects of our residents,” he said.

Asked about Mejia’s remarks, Bass spokesperson Zach Seidl said “theatrical exaggeration and doomsday projections do not represent the city’s current budget status.” Bass believes the city is capable of balancing the budget, delivering services and paying its workers a livable wage, he said.

Seidl also defended the decision to give raises to police officers.

“In a city with more than 3 million people, the most responsible thing we can do is to invest in keeping Angelenos safe,” he said in an email.

Szabo, for his part, said the job-cutting proposal may have “minimal immediate impact” on services. However, the cuts could affect plans by city departments for improving services or launching new programs, he said in his report.

The budget-cutting plan comes weeks before the council is expected to vote on the package of raises with the Coalition of L.A. City Unions, which represents six labor groups, the largest of which is Service Employees International Local 721, which represents custodians, mechanics, traffic officers and many other workers. The deal would provide cost-of-living increases of more than 24% over five years.

SEIU Local 721 president David Green said the planned package of raises will make “major strides” in recruitment and retention. In a statement, he said he looks forward to working with city leaders to “shape hiring priorities” and find new sources of funding.

“Angelenos deserve reliable and consistent city services, and that’s exactly what we fought for at the bargaining table,” he said.

Soto-Martínez, for his part, said he is prepared to vote for the coalition contract. Those six unions received a “fair deal based on the precedent” set by the LAPD’s contract last summer, he said.

“I will be absolutely supportive of that deal because I don’t believe we should be treating workers differently,” he said.