The “Just-No-Money-for-That” Blues 

LOS ANGELES

PLATKIN ON PLANNING-Although I have taken the Los Angeles Times to task for its coverage of local planning issues, especially when it became a mouthpiece for the no on S campaign, on Sunday, July 30, 2017, the paper got it right. So, hats off to investigative reporters Emily Alpert Reyes and David Zahnizer. 

 

In their report on one of the many empty promises that LA’s elected officials contrived to defeat Measure S, the Times discovered that every City Council proposal to end pay-to-pay plan land use corruption has been totally sidelined since the February 2017 election. In over six months of quickly restored business-as-usual, the City Council has yet to hold even one public hearing on its multiple proposals to stop developer money from shaping discretionary land use decisions. 

Most interestingly, the Times also shined a light on another aspect of pay-to-play at LA’s City Hall.   Previous proposals to publicly fund local elections -- that would obviously undermine the financial quid pro quo between developers and elected officials -- were systematically dropped with an often-repeated claim. The City of Los Angeles simply did not have enough money to fund local election campaigns. The real reason, of course, that public funding for electoral campaigns would undercut City Hall’s corrupt, pay-to-play, spot-zoning money machine, was kept in the shadows. 

This is the same excuse that City Hall and its allies routinely turn to oppose to other socially useful programs. Here are a few of the most common examples: 

  • Reduce gridlock, fatalities, and injuries through an accelerated roll out of transit, bicycling, and walking improvements? Sorry, there’s just no money. 
  • Expand LA’s petite park system, and then make sure the parks have recreation programs. Sorry, there’s just no money. 
  • Build public or subsidized housing to stem LA’s housing crisis? Sorry, there’s just no money. 
  • Offer civil servants a safe and reliable retirement? Sorry, it costs too much money. 
  • Plant and maintain a proper urban forest to combat smog, climate change, declining quality of life? Sorry, there’s just no money. 
  • Maintain LA’s legally required General Plan through comprehensive monitoring and extensive public participation. Sorry, there is just no money. 
  • Move from erratic, reactive code enforcement to reliable, proactive enforcement of LA’s building and zoning codes? Sorry, there is just no money. 

But, is this really the case? Is Los Angeles, like the rest of the United States, really so poor that it must let the city fall apart? According to the American Society of Civil Engineers Infrastructure Report Card, infrastructure in the United States is approaching collapse. The national bill to fix such categories as sidewalks, roads, and sewers now totals $2 trillion dollars. 

Has our global city, Los Angeles, home of the 2028 Olympics, also declined to the point that it literally can no longer afford to repair its sidewalks, plant its street trees, and maintain it water mains and sewers? 

The answer is NO. The facts are quite to the contrary. LA is now one of the world’s richest cities, and the United States, despite decline, continues to be one of the world’s richest countries. The real culprit in Los Angeles, as well as the United States, as a whole, is wrong-headed public and private priorities. It has nothing to do with either local or national poverty. 

If you believe that Los Angeles so neglects its infrastructure because the city is scraping the bottom of its financial barrel, then ponder some of these realities: 

First, in LA, the City Council properly funds the LAPD. At this point, it gobbles up 55 percent of the City’s discretionary budget, enough money to allow some sworn personnel to become social media whizzes, Tweeting, E-mailing, Facebooking, and Instagramming LAPD messages to the public. 

Second, poverty certainly did not stand in the way of LA World Airports spending a billion to upgrade the Tom Bradley International Terminal at LAX or CalTrans to pony up $1.5 billion to add another gridlocked lane to the I-405 Freeway between West Los Angeles and the San Fernando Valley. 

Third, if we look at private money flowing into Los Angeles real estate projects, the figures are even more astounding. In fact, it is nearly impossible to keep up with the mega-projects recently built, under construction, or about ready to break ground. For example, to cite just a few of the many projects now underway in Los Angeles: 

  • So far in 2017 real estate investors have plunked more money into Los Angeles than any other North American city. The total amount of money at play is $1.7 trillion, which means that some of this investment, mostly from abroad, is pouring into LA, bankrolling the city’s astounding building boom. According to the Los Angeles Times, the last time LA had so many large real estate projects under construction or ready to break ground was in the 1920s.
  • Much of this money makes its way to Los Angeles through EB-5 visas ($500,000 gets you and your family a Green Card). For example, 300 EB-5 visa holders financed the new JW Marriot Hotel at LA Live. 
  • While these new projects are emerging throughout the entire city, they are largely concentrated at Warner Center, Valley Village, Hollywood, Miracle Mile, Koreatown, and especially in Downtown LA. For example, the Oceanside Plaza project in South Park will cost $1 billion, slightly less than the $1.2 billion price tag for the Wilshire Grand Center high rise at Wilshire Boulevard and Figueroa. 
  • At Warner Center, the Westfield Corporation is constructing a new $1.5 billion shopping mall, while other developers are building thousands of new apartments nearby. 
  • The Taubman Company is spending $500 million to remodel the Beverly Center. 

If we look beyond Los Angeles, the disparity between broad infrastructure underinvestment aside lavish spending is even more appalling. 

The long-term costs of the Iraq and Afghanistan Wars are around $5 trillion dollars. If we add in smaller Middle Eastern wars, such as Libya and Syria, as well as U.S. arms shipments to Middle East client states, the total cost is already $6 trillion. But, wait there is much more: 

  • Our humble planet now hosts vast trillions in underperforming capital looking for profitable outlets for re-investment. For example, in Germany alone there is $17 trillion in savings earning negative interest.
  • William Hartung reports that the total military budget of the United States is now over $1 trillion per year, and it has been this high for over a decade. If even half of this massive amount was spent on infrastructure projects, it could address the entire infrastructure deficit of the United States in as little as four years. After that, we would no longer be playing catch-up and could move on to such important programs as undertaking massive reforestation, converting to sustainable energy, and rapidly building out alternative transportation modes, such as European and Asian-style high speed interurban trains.
  • The Obama Administration planned to spend $1 trillion on a new generation of nuclear weapons and delivery systems, and there is no change under Trump. With about 3 percent of the U.S. economy, that means that this nuclear weapons program alone could fund about $30 billion to repair LA’s failing infrastructure and public services. 

For those who argue that there is no way for the public sector to gain access to these idle or misspent funds, there are numerous proposals ready for immediate implementation: 

  • The trillions in profits that U.S. companies have parked abroad would translate into $700 billion in tax revenue if repatriated to the United States. 
  • Congress has not raised the Federal Gas tax since1993, despite inflation and a current glut that has triggered a major decline in gasoline prices. 
  • A stock and bond transaction tax, similar to the United Kingdom and Japan, would raise $300 billion per year in new tax revenue. 
  • In California, Prop. 13 could be amended to split the tax rolls. This means keeping the existing provisions for single-family homes, but not for commercial property, which is seldom sold. This one change is estimated to raise $9 billion per year in California. 

There are many obvious conclusions from this analysis, such as the need to reprioritize public budgets, and to figure out how to redirect some of this enormous revenue stream to address public good, rather than private greed. 

But, there is also one immediate lesson for Los Angeles (and for the United States, too.) The claim that we must choose between repairing public infrastructure and compensating public employees is simply not true. Like in the United States as a whole, there is more than enough money for both, and then for aspirational programs, such as Medicare or Medicaid for all.

 

(Dick Platkin is a former Los Angeles city planner who reports on local planning issues for CityWatchLA. Please send any comments or corrections to rhplatkin@gmail.com. Previous articles available at the CityWatchLA archives and at www.plan-itlosangeles.blogspot.com. Prepped for CityWatch by Linda Abrams.

 

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