Villaraigosa aides warn of cutbacks

Although Los Angeles officials made gains last year in trimming a persistent imbalance between revenue and spending, Mayor Antonio Villaraigosa’s next city budget may require $50 million to $100 million in cuts to keep the city’s head above water.

The mayor’s budget proposal will not be released for two weeks, but Villaraigosa’s aides -- as they did last year -- are trying to soften the blow by issuing an early warning of impending cuts.

Budget officials, in a briefing for reporters Tuesday, declined to provide details. They said that core services have been spared, and there are no tax increases in the mayor’s budget proposal for the fiscal year starting July 1. They did not rule out fee hikes, however.

Villaraigosa last year made some modest gains in expanding resident-friendly programs, such as street repairs. But officials seemed to hint that dramatic increases for such services are unlikely this year.

“It’s going to be a tougher budget year this year than last year,” said Marcus Allen, the mayor’s deputy chief of staff.

Last year, Villaraigosa’s first budget proposal captured a lot of attention because it contained a presumably controversial plan to raise trash fees by $17 over four years to pay for an expansion of the Police Department. The trash fee increase, however, won unanimous City Council approval, as did the $6.7-billion budget.

This year, Allen seemed to promise few surprises, saying Villaraigosa’s primary goals are to keep money flowing to his priority programs -- such as police hiring -- and to help erase the gap between the city’s financial obligations and the money it takes in, a so-called structural deficit.

Unlike the federal government, the city is not allowed to adopt an annual operating budget with a deficit. To balance its books each year, it must cut spending, raise revenue, dip into reserve funds or defer or borrow for capital improvement projects.

Villaraigosa vowed last year to rid the city of the deficit during his time in office. This year’s structural deficit is $231 million, and the mayor hopes to shrink it to $173 million or less in the coming year and eliminate it altogether by 2010-11, Allen said.

Villaraigosa plans a news conference today to outline his plan for attacking the deficit.

Generally speaking, officials said Tuesday that the mayor intends to further clamp down on workers’ compensation costs and legal expenses. The mayor also has settled on a strategy that closely tracks costs throughout the year and tries to contain them when they appear to get out of line, aides said.

In 2005, the City Council adopted new fiscal priorities designed to keep spending and revenue in balance.

Addressing the structural deficit “follows the line that the council started a couple of years ago,” said Councilman Bernard C. Parks, chairman of the council’s budget committee. “We’re pleased that the mayor is endorsing that.”

City officials have reason to worry about what City Administrative Officer Karen Sisson called “some serious threats on the horizon.”

One big challenge is formulating a new contract with the 11,000 city workers of the Service Employees International Union Local 347. The union represents a variety of workers, including zookeepers, traffic officers and tree trimmers.

The union’s contract expires in June. Last year, union officials hinted they wanted a significant raise and even released a long list of worker-related songs that employees were to blast on portable stereos while picketing.

But they have since moderated their tone

“We’re working close with the mayor’s staff on the budget, and we’re working in a very collaborative way,” said Barbara Maynard, spokeswoman for the coalition of municipal unions.

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steve.hymon@latimes.com