Wage increases for city workers will add $1 billion to LA’s annual budget by 2028, report says

LOS ANGELES, CA – APRIL 18: Los Angeles Mayor Karen Bass, accompanied by her team, presents her first city budget during a press conference at City Hall on Tuesday, April 18, 2023 in Los Angeles, CA. (Irfan Khan / Los Angeles Times)
(Irfan Khan/Los Angeles Times)

Wage increases for city workers will add $1 billion to LA’s annual budget by 2028, report says

LA Politics, Homepage News

David Zahniser

April 13, 2024

Earlier this year, Los Angeles Mayor Karen Bass negotiated a package of wage increases and increased benefits for tens of thousands of city workers, aimed at addressing the rising costs of food, housing and other household expenses.

On Friday, the public got its first glimpse of the price tag for those employee contracts. City Manager Matt Szabo said in a 40-page analysis that the planned salary agreements with the city’s civilian employee unions would add $316 million to the city budget in the coming fiscal year, rising to more than $316 million.

$1 billion annually by 2028.

The agreements, of which there are more than twenty, will go to the city council for a final vote. The contracts have already been ratified by a slew of unions representing clerks, custodians, engineers, gardeners, librarians, mechanics and many other city workers.

For most of these employees, the contracts will cover a period that includes not only the 2026 mayoral election, when Bass is expected to seek a second four-year term, but also the hosting of the 2028 Los Angeles Olympic Games. over a five-year period, the contracts are expected to add $3.5 billion in new workforce costs, Szabo said.

The city’s current fiscal year budget is approximately $13 billion.

Council President Paul Krekorian, who sits with Bass on the five-member bargaining committee, said the agreements will help the city retain existing employees and recruit new ones. At the same time, he said it would be a challenge to pay employees “what they earn” while delivering exactly the same level of service.

“I don’t think there will be a need for any serious cuts in services,” Krekorian said. “But I don’t want to come up with the budget process. Every budget process … is filled with compromises.”

Bass did not immediately comment on Szabo’s report. In recent months, her team has defended the proposed pay increases, saying they will help city agencies retain workers during a severe labor shortage.

“Paying city workers fairly so they can earn a living wage is critical to ensuring city services continue to be delivered with the increased quality and frequency we have been delivering over the past year,” Bass spokesman Zach Seidl said last year. month.

Nevertheless, a former city hall guard expressed alarm about the figures. Jack Humphreville, a volunteer with the Neighborhood Council Budget Advocates, said he believes the expected increase in employee costs will only mean more red ink in the coming years.

“This is going to create deficits, which will create significantly more pressure to increase revenues, either through taxes or additional fees,” Humphreville said. “The money has to come from somewhere.”

The contracts will cover more than 33,000 city workers, about a third of whom are part-time employees.

Among those eligible for the pay increase are members of the Coalition of LA City Unions, which consists of six unions. These groups would receive seven pay increases over five years, or a total pay increase of 24%, once the pay increases are included.

The salary agreements would increase the minimum wage for the city’s full- and part-time employees, to $20 an hour this year and $25 by June 2026. Parental leave would double from six to 12 weeks. become more lucrative.

Friday’s report came amid a growing debate over city spending and what types of sacrifices will be necessary to ensure the city’s workforce is better compensated.

Szabo recently called for the elimination of 1,974 vacant positions, largely to free up money for pay increases not only for civilian city workers but also for police officers.

Bass’ team has already endorsed the general concept of removing unfilled positions from the books and says some positions have been vacant for several years. City Manager Kenneth Mejia has criticized the idea, saying such cuts will threaten the quality of city services.

Appearing at a virtual town hall on the budget Thursday, Mejia said the positions should remain on the city’s books while remaining unfilled for now.

In recent months, Mejia has focused on a new package of pay increases for the city’s police officers, which Bass also negotiated. This deal is expected to add $384 million in personnel costs to the annual budget by 2027, or an additional $1 billion over four years.

Chief Deputy Comptroller Rick Cole, a senior aide to Mejia, said Friday that the city is on an “unsustainable budget path” due to higher statutory payouts, overly optimistic revenue forecasts and higher costs resulting from the pay increases for police officers.

In an email, Cole declined to criticize the new round of pay increases for civilian workers. He said it would be “not fair” to increase the salaries of police officers and then deny other employees similar increases.

“As such, wage increases for every employee will objectively increase costs to the city,” he said. “Therefore, the city must reallocate its budget to reflect the new reality.”

The coming increases will be most felt in the city’s general fund, which pays for basic services such as police patrols, firefighters and paramedics, as well as park and recreation programs.

The salary agreements are expected to increase general fund costs by $196 million in the upcoming budget year, which begins July 1, and by $311 million in the fiscal year after that. Additional annual costs to the general fund are expected to reach $623 million by 2028, according to Szabo’s report.

Bass will announce her upcoming budget on April 22. In recent weeks, she has pledged not to cut positions for police officers, firefighters, garbage truck drivers or other “critical” public safety jobs.

David Green, president and executive director of Service Employees International Union Local 721, said he remains confident the city can afford the new round of wage increases. Bass and the City Council, he said, have already shown that they are “setting budget goals with an eye to the future.”

“City workers have earned their raises, and the council is right to vote for them,” he said.


Please enter your comment!
Please enter your name here


Hot Topics

Related Articles