L.A. Finances: Back from the Brink

Antonio Villaraigosa

Despite reports from earlier this week, L.A. won't have to become a partially two-day-a-week city government after all, as Mayor Villaraigosa finds a surprise $30 million in property taxes.

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The L.A. Times with more on the short-term good news and on how Villaraigosa's announced furloughs wouldn't have flown anyway. (The Mayor's furlough threat came after DWP said it couldn't deliver a fresh $73 million to the city coffers after the City Council killed a proposed rate hike):

Most council members viewed the mayor's proposal for two furlough days a week as a remote possibility because it was likely to spark a protracted fight with labor leaders and council members.

"It's not even the two-day thing. He can't furlough employees without the concurrence of the council," Councilwoman Jan Perry said....

As the Daily News reports, the city is still transferring "$90 million from Los Angeles' emergency reserve fund to meet payroll obligations through June 30" and "'It is never good to have to use that money,' [City Controller Wendy] Greuel said, adding the city has a policy of maintaining a 5 percent reserve to keep its bond ratings and in case of an emergency."

As Matt Welch at Reason magazine (where I am a senior editor) points out, the problem with L.A. isn't so much tax revenues as it is spending.

Mark Lacter at L.A. Business Observed sums up this week's confusion over where and how L.A. was going to find the cash to stay afloat.

(Kevin Winter/Getty Images)

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