The End is Nigh. Will Los Angeles Repent?

Los Angeles is falling fast on a downward economic spiral, and has been for a generation. The city ranks worst in the U.S. in job creation--behind even bankrupt Detroit--and near the bottom in public pension liabilities. Longtime residents complain of declining services, pothole-filled roads, and decrepit schools. Though the coastal cities are thought to be better off than the state's interior, much of Los Angeles seems almost as bad.

On Wednesday, the Los Angeles 2020 Commission released its final report, A Time for Action, the result of an effort that began under former mayor Antonio Villaraigosa. The report--which bluntly identifies the city's "job crisis," "chronic budget shortfalls," poverty, traffic, and poor schools--includes a list of recommendations for turning the city around, focusing on "accountability and transparency; fiscal stability; and job creation."

The recommendations are:

Accountability and Transparency

1. Create an independent "Office of Transparency and Accountability."

2. Create a truly independent oversight and rate-setting body for DWP [Department of Water and Power].

3. Hold municipal elections at the same time as state and federal elections.

Fiscal Stability

1. Adopt a ‘Truth in Budgeting’ ordinance.

2. Be honest about the cost of future promises.

3. Establish a ‘Commission for Retirement Security’ to review the City’s retirement obligations in order to promote an accurate understanding of the facts.

Job Creation

1. Collaborate as a region to bring in more jobs and investment, and tax revenue they generate.

1a. Combine the Ports of Los Angeles and Long Beach.

1b. Establish a Regional Tourism Authority.

2. Focus on economic clusters to generate jobs of the future.

3. Update Community Plans to enhance neighborhood input and establish a thoughtful growth strategy.

Notably absent from the report is any mention of taxes--the word does not appear a single time--even though Los Angeles suffers one of the highest tax burdens in the country, and despite the fact that new Mayor Eric Garcetti's proposal to eliminate the city's business tax faces strong opposition. Critics also noted that the report makes no recommendations to address the loss of entertainment jobs in Hollywood, a key economic pillar.

In general, the report received a muted reception at City Hall. Part of the problem is that the 2020 commission could not reach consensus on a number of issues, and therefore its recommendations appear too scattered for decisive action, and yet too controversial on an individual basis to draw wide political support. In addition, the recommendations focus on what government can do--not on how it can free the private sector to grow itself.

The clock is ticking on the city's debt obligations, its aging infrastructure, and its fraying social ties. Will Los Angeles repent in time? Or will it, like Detroit, fall into a nearly irreversible cycle of self-destruction, one in which politicians helicopter into rich enclaves to raise money while the rest of the city--poor, unemployed, "undocumented" and ungovernable--sinks further into the Third World? The answer remains elusive.


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