Monday, June 21, 2010

As the Financial Crisis Deepens, Los Angeles Throws its General Plan Overboard


Toward a Just Metropolis: From Crises to Opportunities
Annual conference of the Planners Network
Berkeley, California, Saturday, June 19, 2010

By Richard Platkin
Tierra Concepts, Inc.
6400 W. 5th Street, L.A., CA 90048, 213-308-6354

Questions, comments, and corrections welcomed.

The Los Angeles Times (March 1 and March 14, 2010), Southern California’s rapidly shrinking, former newspaper of record, repeatedly complains that Los Angeles’s elected officials, primarily Mayor Antonio Villaraigosa and the 15 members of the Los Angeles City Council, do not have a plan to guide them in their massive, highly selective cutbacks in municipal services, layoffs of public employees, and increases in the fees they charge the public for city services. It is too bad that the editorial staff of the LA Times has not bothered to read its own newspaper. If they had, they would know that LA’s elected officials have two plans before them, and they are carefully following one of them.

They would also know that similar plans are unfolding across the entire country, and in Los Angeles, not far from City Hall, the Los Angeles Unified School District (LAUSD), is facing even more draconian cuts than the city of Los Angeles.

Its budget is as large as the city’s, but its budget deficit is even larger ($600 million vs. $450 million), as is its layoff list (up to 6,000 teachers and other staff members vs. 750 – 1750 city civilian employees). Likewise, the State of California, the Metropolitan Transit Authority (MTA), the Los Angeles Community College District, and the Southern California MetroLink rail service are also facing massive budget deficits and responding to them with the same formula of cutbacks, layoffs, and extra fees. The only difference between their plight and the city’s is the extraordinary amount of push back by California students, parents, and teachers against budget cutbacks and fee increases. On March 4, 2010, they held rallies and marches across the entire state whose participants came from all levels of public education: K-12, community colleges, and universities. Although the academic year is now ending, they vow to soon return and push back even harder against past and future budget cuts, program reductions, and increases in fees and tuition.

General Plan Framework: One plan available to LA’s elected officials, called the Los Angeles General Plan, especially its Framework Element, is required by California state law and the Los Angeles City Charter. It cost the City of Los Angeles millions of dollars to prepare in the early 1990s. The General Plan Framework Element was based on rigorous research, honed through several hundred public meetings, and carefully reviewed, debated, and legally adopted by the Los Angeles City Council and Mayor in 1995. Despite the current ignorance of LA’s largest newspaper, this plan forecast the city’s growth, as well as the infrastructure, housing, and employment needs of a potentially growing population. Most importantly for budgeting purposes, it also clearly identified the city’s policies and priorities for the next two decades (1990 - 2010). But shortly after the plan’s formal adoption, the same elected officials, along with the Department of City Planning, dropped the plan like a hot potato. It was relegated to obscurity to the point that city planners who mentioned the General Plan Framework at staff meetings received icy stares from Planning Department managers.

The General Plan Framework Element became a shelf document, presumably for two reasons.

First, in the era after LA’s 1992 urban rebellion, the largest and most destructive civil disturbance in the United States since the Civil War’s 1863 draft riots in New York City, policing became City Hall’s highest priority – in clear contradiction with the city’s adopted General Plan, which placed on a par with other public services and infrastructure categories. Since then every elected politician, especially the current Mayor, Antonio Villaraigosa, has been fixated on hiring more cops, even if it meant laying off other city employees.

Second, the General Plan Framework highlighted Los Angeles’s broad infrastructure requirements and called for a rigorous monitoring system which could be used for reviewing real estate projects requiring discretionary permits based on underlying growth trends and available infrastructure capacity.

In a city with the worst traffic congestion, air quality, and street conditions in the United States, the General Plan Framework’s focus on growth monitoring, infrastructure capacity, and infrastructure construction would have placed a straight jacket on most real estate speculation. Because the General Plan is growth neutral, developers would have been forced to demonstrate that their projects were filling unmet needs resulting from population growth. Likewise, they would have been forced to demonstrate that Los Angeles had sufficient infrastructure capacity to avert environmental impacts resulting from their projects. With an accurate and timely General Plan, few developers could have met these requirements, and their projects would have been rejected in staff reports as a prelude to the rejection by decision makers.

City Hall’s decision to jettison the Framework shortly after it was adopted in 1995, in combination with the abandonment of General Plan monitoring in the year 2000, was no different than parallel decisions in Washington in the same period to roll back financial regulations and enforcement in order to green light riskier investments, such as high risk mortgages and derivatives. This is why the General Plan Framework has been totally ignored ever since by the city’s elected officials, department managers, and local press. Furthermore, the dormant General Plan Framework Element’s horizon year is 2010. This means the Framework’s empirical basis is about to expire, and there are no known plans to update, rescind, or replace it. Even though 2010 census data will soon be available, and the logic of using current data instead of antiquated data from the 1990 census to make budgetary and land use decisions from 2010 onward is unassailable, it is totally off City Hall’s radar. As a result of this retreat from the General Plan, a consortium of neighborhood organizations are suing the city of Los Angeles to force it to comply with its own legal commitment to annually monitor the city’s growth trends, infrastructure needs and capacity, and effectiveness of the General Plan Framework’s goals, policies, and programs. An out-of-court settlement for that suit is now pending.

Nevertheless, as LA’s city officials muddle through the “Great Recession” with ample guidance from corporate insiders, they have another plan to guide their sharpened pencils and knives in carving away vital municipal services and firing hundreds, and possibly thousands, of public employees. It is their neo-liberal “Race to the Bottom” plan (i.e., neo-liberalism is an approach to governance which presents incentives to private businesses, such as contracting out and deregulation, as the primary tasks of the public sector). The difference is that their Race to the Bottom Plan is not required by the City Charter or by State law. Similarly it has not been openly researched, placed in writing, rigorously debated, legally adopted, or shared with the public. Nevertheless, the LA Times reports about this plan every day, including admonishing editorials and intricate details about the two teams competing with each other over the best way to reach bottom. Furthermore, if the paper’s editors bothered to read local blogs, websites, and e-zines, they would know Los Angeles has a third team in the wings, the Clean Sweep slate, with its own, slightly different Race to the Bottom Plan to be implemented if they manage to win several or more City Council elections.

The Race to the Bottom Plan: So what exactly is the Race to the Bottom plan, who are the two and possibly three teams competing to implement it, and what are their differences? In one corner is Mayor Antonio Villaraigosa, the California chair of Hillary Clinton’s and then Barack Obama’s presidential campaigns. He is backed up by a majority of the largely Democratic City Council and guided by the City’s Administrative Officer, hatchet man Miguel Santana, as well as Austin Beutner. Beutner is simultaneously an in-house Wall Street banker, the city’s “Job’s Czar,” the First Deputy Mayor, and the General Manager of the enormous Los Angeles Department of Water and Power. Beutner’s illustrious pedigree includes high finance jobs at Smith Barney, the Blackstone Group, and working for the U.S. State Department in Moscow to assure the rebirth of market capitalism in Russia. The Mayor also has a cheering section from Wall Street’s three major bond rating companies. Their job, like the LA Times, is to cajole the City Council whenever it takes a breather in slicing and dicing city government’s non-police functions.

In the other corner are several members of the Los Angeles City Council. They are backed up by most of the city’s employee unions and some neighborhood associations. So far this team’s greatest achievement has been to cut city programs from the top through the ERIP, a golden handshake program to retire 2,400 older employees. Otherwise, they call for shifting cuts to other city departments, slightly less contracting out of municipal services, and more scrutiny in selling off city assets.

In the wings, is the Clean Sweep slate. The members of this prospective electoral slate do not hold office, but most of its members have been active in neighborhood councils, official community groups established by the City of Los Angeles through its new year 2000 City Charter. While the Clean Sweep group presents itself as outsiders, the neighborhood councils were established, regulated, and funded by the city. It should not be a surprise then that the Clean Sweep platform is neo-liberal to the core. They consider public safety (i.e., policing) to be the city’s most important function, and they call for reductions in the salaries, benefits, and pensions of city employees. Since they, too, are on the police band wagon, they make no mention of reducing the salaries, benefits, numbers, or pensions of police officers.

In the case of Clean Sweep, it is increasingly apparent that their home on Main Street closely resembles the mansions of Wall Street. In effective, they present an echo, not an alternative to the think tanks and financiers targeting the non-military, non-police functions of the public sector. If Clean Sweep manages to win several City Hall elections, most of the Race to the Bottom plan will seamlessly barrel on. Disagreements over local bailouts to large real estate schemes will be papered over with agreements to pare back contracts with municipal labor unions, up retirement ages, and trim pensions. Since Clean Sweep subscribes to a broad, “business friendly” agenda of applying private sector employee standards and practices to public employees, the Job’s Czar, Austin Beutner, would have Clean Sweep officials eating at his well-appointed table shortly after they arrive at City Hall.

So, what is the mysterious Race to the Bottom plan on which these teams agree? So far it has at least 17 components, and counting:

1) Scrupulously make sure that there is absolutely no connection between the city’s feeble planning process and its even more feeble budgeting process. None of the Race to the Bottom teams ever mention the city’s out-of-date General Plan would never bring it up to date, except by a court order, and would never utilize it to prioritize the city’s services and infrastructure investments.

2) Reduce the non-police role of city government by eliminating several civilian departments, shrinking many municipal programs, and getting rid of thousands of career city employees in these “superfluous” offices. City Hall is throwing overboard those civil servants who deal with cultural events, urban forestry, libraries, parks, environmental affairs, social services, prosecution of code violations, and neighborhood councils. So far the two major teams reluctantly agreed to the early retirement program and are now preparing to fire 750 -1750 city employees, with the Los Angeles Police Department, of course, exempted from these layoffs.

While Los Angeles has had many smaller, interconnected budget crunches in recent decades – all of which reflected larger financial crises -- this time the elected officials have seriously rolled up their sleeves when it comes to attacks on civilian employees. In the midst of a deep recession, these economic wizards want to slash public payrolls to make sure that the city’s job losses keep up with those in the private sector. Some joke – with much truth -- that they are channeling Herbert Hoover.

3) Cut the hours and pay of remaining non-police employees through furloughs, speed-ups, and salary, hiring, and promotion freezes.

4) Reduce the power of public employee unions to organize labor actions, negotiate contracts, and protect their members, in part to reduce the expectations of private sector workers regarding their own declining salaries, benefits, union representation, job security and protection, and retirement.

5) Increase the payroll deductions for remaining civilian employees.

6) Except for parking and traffic violations, minimize enforcement of the city’s many laws, especially building and zoning codes, as well as conditions imposed on developers through planning cases.

7) Accelerate the processing of applications for building permits and related city planning land use “entitlements.” To expedite these permits, the Mayor deployed the head of his Business Team, Bud Ovrom, to become the new General Manager of the city’s Department of Building Safety.

8) Augment city revenues through inflated, regressive fees on municipal services, such as electricity, water, and garbage collection, as well as enormous increases in the cost of parking meters and fines for traffic violations.

9) Offer truly enormous grants, cheap loans, fee waivers, and subsidized public infrastructure to large real estate projects, primarily paid through the city’s General fund, with smaller amounts from the city’s Community Redevelopment Agency.

10) Avoid any analysis of the causes of the city’s repeated budget crises in the past or at present, other than the current recession. Three decades of deferred infrastructure investments, as well as numerous hiring and promotion freezes, along with several rounds of smaller layoffs have, in effect, been ruled out-of-order.

11) Never call for any progressive taxes and never mention proposed reforms of California’s Proposition 13. Serious analysts know Proposition 13 has become a major tax dodge for commercial property. Since 1979 its adoption has cost state and local government dearly. Nevertheless, it will continue to be a major backdoor subsidy for those who invest in commercial real estate in Los Angeles and in the rest of California.

12) Maintain absolute silence on the long-term reductions in Federal programs for cities since the Nixon administration, as well as two expensive current Federal programs for which the sky is the funding limit: the bailout of the banksters during the past two years and the endless wars in Iraq, Afghanistan, Pakistan, and probably Iran. When it comes to the bailouts and the extraordinarily expensive and illegal energy wars, both of City Hall’s cutback teams, as well as Clean Sweep, have taken an oath of silence.

13) Lease or sell off money-making city assets, such as property, parking structures, and parking meters, to cronies.

14) Privatize additional city services, such as computing, which will go to Google.

15) Defer investment in the city’s infrastructure, even though Los Angeles sits on major earthquake faults and is subject to life-threatening floods and wild fires. The “Big One,” a massive earthquake larger than 1992’s Northridge earthquake, could happen at any moment according to the U.S. Geological Service and FEMA, yet City Hall has systematically avoided adequate infrastructure planning and investment since that late 1960s.

16) Erode public employee pensions by increasing deductions for remaining employees and discussing changes in retirement formulas, such as age requirements.

17) Join the corporate media by floating proposals to cut back Civil Service protection for city employees, especially when it comes to seniority and bumping rights during layoffs.

Neo-liberal essence of the Race to the Bottom plan: Viewed in the aggregate, the Mayor, the City Council, and the Clean Sweep slate clearly have a plan, and its essence is to use the cover of a deep recession to institute many existing proposals, usually labeled “neo-liberalism.” In the view of the think tanks and politicians, its intent is to make government more “business friendly.” In more straight talk it is “crony capitalism” mostly for real estate speculators, or the use of tax payer money and public resources to increase the short-term profits of private investors with political connections to City Hall.

Although most of the pols don’t realize it, there is a deeper method to their politician’s madness. They delude themselves with claims about imminent prosperity, and they undoubtedly believe they are just pursuing short-term budget fixes until the U.S. economy recovers from a deep recession. Few of them understand that the U.S. economy, like the global economy, is in the midst of a deep, long-term financial crisis. An even deeper recession or even a global depression is just as likely as a recovery. But regardless of the exact trends, most of their service cuts and public employee layoffs are here to stay. Furthermore, the cuts and layoffs will get worse as more components of the Race to the Bottom Plan are unveiled and implemented.

If an economic recovery eventually returns, it is not going to be used to raise the salaries and benefits of public employees, fortify pension funds, build libraries, plant trees, and educate students. This is because, sadly, the decision makers prefer to sacrifice most local government functions to pay for other government priorities, in particular real estate subsidies, policing and surveillance, corporate bailouts, military hardware, and foreign wars.

Their plans to fill these enormous local gaps with such gimmicks as additional charter schools, high stakes testing, contracting out, and privatization, are nothing more than an unintended strategy to reach bottom. While the pols might actually believe in these schemes, or that cities like Los Angeles can function without adequate city plans, schools, libraries, parks, urban forests, cultural events, building inspectors and plan checkers, and neighborhood groups, they are really diverting local public resources to support other priorities, such as stoking another real estate bubble.

There are some clear lessons to be learned from this debacle:

1) The slashing and burning of most local public services is a long-term trend. It is not just a blip resulting from the Great Recession. Most of its components, in fact, have been observable for the past three decades, since the adoption of Proposition 13 in California.

2) The purpose of the Race to the Bottom Plan is not just to dish out public favors to well connected investors who need a short-term boost in their bottom line through contracts or bailouts, but to martial public resources for other projects and programs, in particular policing and the Pentagon.

3) So far, the public employee unions do not have an effective program to reverse these trends. Unlike Greece, France, and Spain, they have yet to organize work actions to stop cutbacks and layoffs or form strong alliances with the public, the other victim of these cutbacks. For the most their primary political strategy is to fund the campaigns of the very same politicians who are imposing furloughs and layoffs on their members.

4) Any solutions to this long-term crisis will come from the bottom up, not the top down. There are no politicians on the horizon in Washington, D.C, in Sacramento, or at LA’s City Hall, capable of rectifying this situation. Likewise there are no economists with a magic formula to fill local government coffers in order to provide high quality employment and public services for its own sake and to promote financial recover. So far students and teachers have taken the lead in direct actions, and they have provided a model for other public employees and the general public to form effective political alliances.

1 comment:

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