The next Mayor of Los Angeles needs to have a firm understanding of the economy to pull our city out of economic crisis.
For the better part of a decade, I’ve studied and worked on our economy, not only in the public sector as an appointee to President Obama’s Treasury Transition Team and a Special Assistant to Paul Volker on the President’s Economic Recovery Advisory Board, but in the private sector as a banker, a consultant, and most recently as the Chief Strategy Officer (CSO) at a local technology company. I have the knowledge, creativity, and fresh perspective to revive LA’s economy.
Early on in his campaign, Eric Garcetti said he wanted to be the CEO of Los Angeles. I call that bold talk for a man who’s never been in the private sector, let alone a C-Level executive. The best CEOs are those who avoid crises, not create them and then promise to clean them up.
Controller Greuel, who touts her government relations job at DreamWorks as private sector experience, recently described Councilman Garcetti as “asleep at the wheel” during his city council presidency. I say he was very much awake, which, in my opinion, is far worse.
It’s no secret that not only Councilman Garcetti, but also Councilwoman Jan Perry and Controller Greuel were instrumental in creating the pension problem that’s now crippling our budget. Pension fund liabilities are on pace to make up half of our city budget in 5 years, forcing cuts from essential city services like parks, libraries, and maintenance of our transportation infrastructure. Current proposed solutions are insufficient to address this growing problem.
As a native Angeleno, I’m disappointed. I trusted our elected officials like we all did and have been repeatedly let down by people making poor decisions with numbers they don’t understand.
Much more must be done to ensure that the city avoids bankruptcy and has the funds needed to deliver the services and make the investments that Angelenos need and deserve. We must find a way to reform our benefit system for both new hires and current employees. This could be accomplished with increases in the retirement age, adjustments to the benefits formula (by reducing the COLA), a move towards a 401(k)-like plan, and buyouts. Pensions are nothing more than deferred compensation.
If the City offered and public sector employees chose to receive this compensation sooner rather than later (legal under our reading of California state law), then we could reduce the city’s unfunded pension liabilities.
Garcetti’s kneejerk rejection of Mayor Riordan’s plan was woefully premature. Riordan’s plan was a good start to finding a long-term solution to the pension problem. As a city, we’re not in a position to limit discussions and throw away ideas. That’s not leadership. That’s hubris.
We need a mayor who understands how to live within their means and balance a budget. We need a mayor who understands that we can’t use regressive sales tax increases to cover up our politicians’ mistakes. Instead, we need to create an impact investing culture.
South LA, the Eastside, and the East Valley – ignored by too many of our politicians – are undervalued assets. If we invest in these areas – bring jobs and training programs to areas of our city where people are hungry to work, rather than build a hotel or stadium downtown – then LA’s economy can flourish, and we’ll get the revenue we need to close our deficit. By reforming our pension system and focusing on revenue sources grounded in development, not punishment, of our poorest communities, we can put LA’s budget on a sustainable path.
Growing up poor on the eastside, I learned that skill as a child. When even Section 8 housing is outside your means, living on a budget is a matter of survival. Los Angeles is in a similarly dire situation. Councilman Garcetti is a charming orator, but lacks the economic substance to lift Los Angeles out of the pit of economic crisis.
I’d trust Eric Garcetti with my speeches, but never with my check book.