Urban Planning professor Chris Tilly has penned a piece for Los Angeles Magazine in which he proposes solutions to help fix the city's budget problems.
After assigning responsibility for the crisis to the ongoing nationwide economic slump, growing inequality between the haves and have-nots—and the increased dependence on public services to make up the difference—and an outdated tax structure, Tilly takes a look at concrete steps city leaders could take to close the gap.
- Since its influence on the broader economy is limited, the city should "spend more than it takes in," using accounting mechanisms to increase expenditures while following the letter of balanced-budget laws. In an atmosphere of reduced private economic activity, decreased public expenditures could send the region back into recession.
- Target this spending toward efforts to reduce inequality. Tilly praises Metro's Project Labor Agreement, which commits the transit agency to hire construction contractors from traditionally excluded populations.
- Expand collections of existing taxes and increase user fees, and enhance public employee contributions to pension funds. Tilly cautions that such measures should be targeted toward higher income brackets in order to maximize overall economic output.
- Keep sales taxes low but "relax" California's Proposition 13 to expand property taxes. Property taxes help put to work funds that would otherwise be saved, Tilly argues, while sales taxes take money away from those most likely to spend it. "Best of all would be higher state or federal taxes on the richest," Tilly says, coupled with measures to return those funds to local governments.
In addition to his appointment at UCLA Luskin, Tilly directs the UCLA Institute for Research on Labor and Employment .