MAYOR TO PURSUE CUTBACKS, BUT NO NEW TAX INCREASES VILLARAIGOSA: BELT-TIGHTENING MAY CUT DEFICIT $100 MILLION.

Byline: RICK ORLOV 

Staff Writer

Mayor Antonio Villaraigosa said Wednesday he will not seek new taxes to help fund Los Angeles' budget next year as he pushes an aggressive belt-tightening plan to cut the city's deficit by $100 million.

But just weeks before unveiling his second annual budget, Villaraigosa said economic uncertainties facing the region require the city to rein in spending in its expected budget of about $6.7 billion.

"This is a time for us to exercise fiscal discipline," he said at a City Hall news conference with Controller Laura Chick.

While revenues have continued to grow about 5.4 percent a year, Villaraigosa said spending has risen nearly 8 percent a year.

"You can only afford that for so long before there is no money left," he said.

The mayor said he has asked all department heads to reduce spending by 5 percent and is looking for efficiencies and improvements to achieve up to $35 million in savings.

"If we do this right, no one in the public will see any reduction in services," Villaraigosa said.

The only area where he has said he will increase spending is in the Police Department, which has a goal of hiring 1,000 more officers by 2009. That expansion is being funded through an increase approved last year in the trash collection fee.

"Even at that, it will not be enough officers," Villaraigosa said. "We will still be underpriced."

Chick said she has been working with the mayor to find savings in city operations. Among the areas she has targeted for the year ahead are city payouts for workers' compensation -- estimated at $127 million this year -- and legal settlements, expected to total $47 million.

Villaraigosa said one of the keys to his spending plan will be the success of negotiations with city employee unions, with which new contracts for some 13,000 workers are pending.

"They are not going to find a more pro-labor mayor than me, but at the same time, we have to be fiscally prudent," he said. "We are going to open our books to the unions and lay everything on the table so they can see where we stand."

The city's financial squeeze is due to a soft real-estate market and an increase in the number of foreclosures that have led to a drop in property tax revenue, he said.

If city officials are successful in shaving $100 million off the budget's structural deficit -- the gap between revenue and spending -- Villaraigosa said the city will have cut the deficit in half.

"We had to borrow from our savings account, our reserve fund, to keep the city going," he said. "There is only so long you can do that before you go broke."

rick.orlov(at)dailynews.com

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