Mayor sets stage for budget cuts

With Los Angeles feeling the impact of the national financial crisis, Mayor Antonio Villaraigosa asked city department heads Friday to prepare to significantly cut spending by reducing services and cutting management.

In a letter to all general managers, Villaraigosa warned that L.A. is facing another dire budget year and the city will have to cut jobs and services.

The Mayor's Office and city officials are now beginning work on the 2008-2009 budget, which will be adopted in May.

He asked managers to prepare two budget proposals by early December. One would assume no growth in spending. The other requires department heads to cut spending by 6 percent if they have a budget less than $20 million or 9 percent if they have a budget more than $20 million. Kerry Cavanaugh in the Daily News.

"Balancing next year's budget means that many difficult options will be before us, including position cuts and mandatory across-the-board measures," the mayor wrote.

Villaraigosa said city finances are being strained by the combined effect of growing unemployment, a tight credit market that limits business growth and a stagnant housing market. City financial managers project a deficit of $282 million.