3 Big Economic Challenges for the Next Mayor of Los Angeles

The next mayor will have the challenging task to address pending budget issues.

March 5, 2013— -- Angelinos went to the polls today in the city's mayoral primaries. Their ballots will narrow the field of candidates who are competing for leadership of the city and stewardship of its decrepit economic state.

Councilman Eric Garcetti and City Controller Wendy Greuel are likely to emerge from today's primary, beating out Councilwoman Jan Perry, Kevin James and Emanuel Pleitez among others. A runoff election will be held May 21 to decide the next mayor of the country's second largest city.

The city has suffered greatly as a result of the Great Recession and the next mayor will have the challenging task to address pending budget issues as well as chart the city's economic future.

Budget Shortfall

Just before the recession hit, city leaders – including Garcetti and Greuel – agreed to hire hundreds of police officers and give most of the city's civilian workers a 25 percent raise over five years.

Increasing the number of officers to 10,000 was one of Mayor Antonio Villaraigosa's campaign promises. When the officials agreed to the raises for city employees, they did so assuming that there would be 4 years of 4.4 percent economic growth, according to the Los Angeles Times.

However, the recession took a hard toll on the city and officials have cut 5,300 position or nearly 15 percent of its workforce. City unions have had to make concessions in light of the crisis.

New Revenue

The city has had to cut back heavily or postponed many services such as street repairs in light of mounting deficits. Already, the city estimates a $216 million revenue shortfall of its $4.84 billion spending projections.

Los Angeles cannot simply cut its way out of its budget woes. The next mayor will have to find ways to increase its revenue. One measure on the ballot that may add is a sales tax increase that, if approved, would add $167 million to the budget annually. Proposition A, which needs a simple majority to pass, would increase the city's rate to 9.5 percent, one of the highest in California.

Strengthen the Economy

Finally, the next mayor will be tasked with strengthening the regional economy. It needs to be diverse to withstand fluctuations and provide jobs with pay that families can thrive on. The city has had a poor recovery from the recession, according to economic measures. But the economy had been faltering for decades, according to the Los Angeles Times.

"Over the past two decades, Los Angeles lost almost every sector that mattered to the middle class: automobiles, steel, shipbuilding and, of course, aerospace. In all, 56% of manufacturing jobs, or nearly half a million positions, have disappeared.

"The change is reflected in income statistics for that period. Nationally, personal income has increased by 2.4% per year, adjusted for inflation. Locally, it grew at half that rate."