Los Angeles County wants another half-cent sales tax. What’s new?
We already approved a 0.5% sales tax increase to address homelessness. Now the county is floating another 0.5% increase to backfill recent and punitive federal health and human services cuts.
Supervisor Holly Mitchell, who co-authored the proposal, described the situation as a “federally imposed crisis” that, in the absence of state action, “could only be addressed by raising taxes on county residents.”
That sentence deserves careful examination.
“Could only be addressed” by raising taxes? In a $49 billion government?
Let’s begin with honesty. The federal withdrawal was abrupt, targeted and mean-spirited. It is unnecessarily harmful. Local governments are now forced to respond to preserve essential services. Something does need to be done to mitigate these cuts. There is no argument there.
However, when leadership says the only solution is taxation, it signals something deeper. Reform has not been seriously put on the table, and protecting headcount appears to outrank protecting taxpayers themselves.
Los Angeles County’s annual budget is roughly $48-$49 billion. Personnel costs alone run approximately $15 billion per year, based on public payroll data showing about $11-$12 billion in wages and another $3-$4 billion in retirement and health contributions. Contracted services spending has climbed from roughly $3.2 billion in 2014 to about $6.2 billion by 2023.
This is not a fragile system gasping on fumes. It is one of the largest municipal enterprises in America. It is notoriously bloated. Anyone who has interacted with county processes has seen how ordinary tasks become complex and expensive when layers of staffing and management accumulate. Think of the proverbial scene: One man digs the hole while five well-paid experts supervise.
In private enterprise, when revenue declines, management adjusts quickly. Headcount shrinks. Middle management is reduced. Duplicate leadership roles are eliminated. Overlapping offices are consolidated. Vendor contracts are renegotiated.
It is hard mental and emotional work. It requires political courage. It can mean confronting unions and internal constituencies. But that is leadership when leadership is needed.
Government becomes bloated when the revenue spigot is always open and when the tax handle can always be cranked further. It becomes bloated when the first instinct is to protect internal structure rather than rethink alternatives.
Los Angeles County is not a jobs program. It does not exist for its employees. It exists to provide essential, efficient services to the residents who fund it. It should contain internal audits and restraints that minimize overhead. It should reward efficiency and remove redundancy. Yes, I understand that sounds like asking for a near miracle.
Consider homelessness. Since 2016, voters have approved billions in new funding. Yet audits and federal investigations have found weak financial controls, inadequate tracking of funds, instances where billed services could not be verified, and structural accountability failures within oversight agencies.
Federal prosecutors have charged nonprofit executives in cases involving roughly $23 million in alleged diversion of homeless funds for personal enrichment. Those cases are ongoing, but they underscore the point. When oversight is weak, throwing more money at the system does not fix the system.
We funded homelessness efforts because we care. Our intentions were generous. Too much of that generosity has been absorbed by overlapping agencies, expansive staffing structures, favored contractors, and even alleged graft.
My own bleeding heart aches for the waste in our well-intended taxes to end homelessness.
So instead of the knee-jerk response to return to the taxation well, let’s get down to real business:
Reduce county personnel costs of $15 billion by 10% through attrition, consolidation and elimination of duplicate management layers. That equals $1.5 billion annually. And don’t fire the worker-bees — go after the bloated supervisory layer and redundancies in departments. Audit the $6 billion in contracted services and cut the stupid stuff for even a 5 to 10% inefficiency gain and you yield another $300 to $600 million per year.
Reform will not be painless, and savings may not appear overnight. But that is what responsible stewardship requires.
That is $1.8 to $2.1 billion in potential structural savings. Enough to address the pending crisis without hammering taxpayers again with a regressive sales tax that hits the poorest hardest.
There is a hard limit on what families and businesses will tolerate. Many believe we crossed it with the last round of homeless tax increases.
Before county officials return to the trough for another half-cent, they should prove they have first squeezed waste out of the system they already control.
Reform the payroll.
Audit the contracts.
Consolidate the duplications.
Trim the management layers.
Improve delivery of existing services while you’re at it.
Then come back and make your case.
Because Los Angeles County does not exist to sustain a bureaucracy. It exists to serve the people who pay for it.
And right now, the people are tapped out.
Gary Horton is chairman of the College of the Canyons Foundation board. His “Full Speed to Port!” has appeared in The Signal since 2006. The opinions expressed in his column do not necessarily reflect the opinions of The Signal or its editorial board.
