Speech by Jan Perry November 8, 2012

Refocus, Restore and Renew the Promise of Los Angeles

I first came to Los Angeles for a Rose Bowl game. It was January 1, 1973. The sky was blue, the weather was warm and the mountains majestic. I moved to Los Angeles the following year. Los Angeles was a city of opportunity: a place where it didnt matter who you were, where you came from, or who your parents were. Los Angeles was my Shangri-La, a place with so much promise. Tom Bradley had been elected Mayor and I believed that with hard work, dedication and a drive to succeed no matter the odds, I would achieve my goals. I am deeply grateful to our city for the opportunities I have had and want to restore that promise for the next generation. In recent years, Los Angeles has been challenged in many ways. Weve put off the tough decisions, seen industrial and white-collar jobs leave the city, and watched our infrastructure crumble after years of unfulfilled promises. We have fallen behind. And thats why I am running for mayor to put Los Angeles back in front, to restore the city. Together, we can rebuild Los Angeles, a place that attracted so many from around the world. We cannot succeed unless we come together and refocus on the most pressing issue before us. I am offering some principles for governance today, I do not profess to have a detailed plan or all of the answers as to how we will implement new concepts but we must start this important conversation. We must refocus on the core functions of city government, those departments, services and responsibilities defined in our city charter.

Those departments include police, fire, city attorney, parks, libraries planning, and public works. These departments are the core of all local government. When we refocus on the core functions, we can begin to restore and renew our city. To do that we must: REFOCUS our efforts to get the city on firm financial footing; RESTORE confidence in city government by balancing our budget and closing our long-term structural deficit; and RENEW the promise of Los Angeles. That promise starts with being honest with both the public and our city employees about our current economic condition. For too many years, Los Angeles has been plagued by get along go along politics, and by taking the path of least resistance. A path that does not address the hardest questions and passes the buck. A good example of this kind of leadership was the recent City Council approval of an extension of the business tax holiday for new businesses in the city. It was passed not because it will lead to more jobs or would close our long-term structural deficit. It passed because it is an election year and its a good policy on which to campaign. We cannot afford that kind of leadership. The tax holiday may feel good, but its not going to accomplish much for Los Angeles. It hurts existing businesses, places them at a competitive disadvantage, adds millions to our long-term structural deficit, and may not add one single new job.

I voted against the extension of the tax holiday because it created a false promise a promise of more jobs and more opportunity for our struggling small business owners. Im running for mayor to end the days of false promises that grab a great headline, but dont deliver. This has to begin with an honest conversation with our city employees and Angelenos about our finances and the hard choices we must make to solve our budget crisis. We are facing a structural deficit of more than a billion dollars over the next five years, with a projected $216 million deficit for next year alone. Los Angeles is facing insolvency. When I am Mayor of Los Angeles, we will start living within our means. We will not address the deficit with one-time fixes, budget gimmicks, short-term tax increases, or borrowing. In fact, this week we will be asked to vote on a group of new tax proposals that seek to tax the city out of the budget deficit. But I know that more taxes will not cure the structural deficit. Temporary tax increases are a gimmick, forestalling the tough decisions. I am against the proposed increase in the sales tax. I am against the increase in the documentary transfer tax. I am against raising taxes because they echo the failed leadership of our past. Im running for Mayor to put an end to the long-term deficit and balance our citys budget. To do this, we have to reduce our costs just as the private sector must do in tough times. That starts with focusing on our major obligations employee salaries and benefits.
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In the next fiscal year, city revenue will increase by about $73 million, while employee labor costs will grow by $208 million, creating a labor cost deficit of $135 million. In good times, the city negotiated an 11 percent increase for general fund employees over the next two years. That was in 2007, before the Great Recession turned surpluses into deficits, shuttered businesses, and drove people from their homes. That was before the world was turned upside down. Both fiscal reality and our constituents tell us that something needs to change. We need real reform that answers the big questionhow can we sustain our current pension and benefits system? It saddens me to say that because I believe in our city workers. I believe in their drive to make this city better each and every day. I believe in the honor, dignity, and courage of our public safety officers that risk their lives daily to protect the public, fight crime, and deliver emergency care. I believe in the quiet resolve of our city workers who come to work each day and work hard to fill potholes, pave streets, deliver services, and assist business. I believe in the hard fought benefits that the labor movement has negotiated. I believe that we should pay our employees a living wage, with health care and pension benefits, that we as a city can afford. But the truth is that we cannot afford to continue to pay the city workforce at current salary and benefit levels. The only way that Los Angeles can avoid insolvency is to bring our workforce back to the negotiating table to discuss salaries and benefits. First, we must refocus on the delivery of core services - public safety, infrastructure, and planning. For non-core services, we need to look at competition between the private and public sector and seek the best agreements for the city.

We need to consider allowing private contractors to operate the LA Zoo, the Convention Center, and other non-core services currently administered by the city. Employee benefits must be restored to sustainable levels. As Mayor, I do not want to be forced to tell our retirees that our resources are at risk nor tell our current employees that they will be laid off or have to take more furloughs. Second, our employees need to contribute more towards their pension and health care costs. I propose that every employee pay 10 percent of the cost of their medical coverage. This would cost the average worker $120 per month. Currently, city employee contributions for their health care range from 0 to 5 percent. On average, the city is contributing $1,200 per month per employee. This one increase would save the city a projected $24 million per year. Not every employee pays the same percentage towards their pension. Public Safety pays 11 percent, while other employees only pay 3% toward their pensions. ALL Employee contributions should be at the same level, 11 percent. This reform would cause a savings of about $20 million per year. Lastly, we must renew the balance in our employees salary structures. That starts by realigning salaries to ensure that everyone is treated fairly. Is it fair that some unions have seen yearly pay increases, while our firefighters have not? As Mayor, I will not allow for negotiated pay increases until our pension obligations are sustainable AND we have closed our long-term structural deficit. These proposals are much less dramatic than what a judge would dictate if the City of Los Angeles is insolvent. We need to come together as a city, start making the structural changes necessary and make Los Angeles work again.

Bringing all Unions, Police Officers, and Firefighters to the table is going to be a major part of the solution to address our structural deficit. But it doesnt end there. We need to focus on all areas of our city and that includes the Department of Water and Power. The most recent Rate Payer Advocate Report reveals that DWP salaries are 26 percent higher than similar utility workers employed in Southern California. Bloomberg News reported that DWP employees make on average 40 percent more than comparable city employees doing the same job. This pay disparity is just plain wrong. To end this disparity, as Mayor I will ensure that DWP employees pay the same amount toward their pensions and healthcare costs as other city employees and that their pay is comparable to city employees. The Rate Payer Advocate also warns us to expect year-to-year increases in electricity rates, with a projected increase of more than 32 percent over the next 5 years. These electricity rate increases will not only hurt rate payers, but also our ability to compete with other cities for new businesses and retain business operations in the city. As Mayor, I will work to create parity between our city departments. Im running for mayor because I have the courage to speak the difficult truths, end the failed politics of following the path of least resistance, and begin to rebuild the peoples trust in government. I did not come to these conclusions or to take these positions with joy in my heart. My political friends advised against my taking a firm position on fiscal policy. I was told it would be a mistake. But the next mayor of this city is going to be faced with this enormous challenge and must be ready to take it on. I am life-long Democrat who believes in labor unions and in every workers right to organize in both the public and private sector.

I spent my youth organizing side-by-side my parents, fighting for workers rights and fair housing. I know the value of this work and the struggle of our working families especially in tough times like these. There is no person running for mayor today who has fought and pushed for more project labor agreements than I have and I am very proud of the fact that some projects and developments like Staples Center and LA Live have been built by union labor that earn good wages and benefits. Im equally proud of the hard fought inclusion of local hire provisions in the new project labor agreements, to ensure that the communities with the highest unemployment rates in the city are given the opportunity to get a job. I believe in the labor movement and the hard fought rights and benefits that it has delivered to working families. As Mayor, my primary responsibility will be to pursue policies that are fair and benefit all residents of the City of Los Angeles leaving no one behind. Leaders must begin to say no when it is easier to say yes, and make the difficult decisions now so that we don't betray future generations of Angelenos for political expediency. Im running for mayor to: REFOCUS on the citys core functions; RESTORE the confidence of our residents in city government by balancing our budget and closing our long-term structural deficit; AND RENEW the promise of Los Angeles so that my 21-year-old daughter and her generation, their children and grandchildren can realize their dreams. I want to bring Los Angeles back and deliver the promise of this city that was my Shangri-La. Thats why Im running for Mayor. To bring people together and Refocus, Restore, and Renew the promise of Los Angeles.
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