In most bureaucracies, programs and people cut from budgets often return with the corresponding rise in revenue. So the only real product of cuts is short-term relief followed by restoration of the cut people or programs. That creates an economic roller coaster that makes long-term planning difficult and causes tremendous disruption in nearly every department of the city. Cuts lower morale, which affects productivity.
For the City Council, budget cuts create the illusion of taking meaningful steps when all they are doing is kicking the real problem down the street.
The solution is to establish strategies that will ensure long-term growth and prosperity. Budget cuts need to be coupled with the development of revenue-growth opportunities; that is, the City Council should be looking at ways to generate ongoing, sustainable revenue through increasing business development.
Instead, the attention of residents is being diverted from the budget crisis and toward the subject of illegal immigrants. This is a stall tactic until the recession ends and we all resume our shopping at South Coast Plaza.
Developing long-term revenue strategies is difficult and takes people with the gray matter to think about the city three, five or 10 years out. Budget cuts are easier because residents have been tricked into thinking that that's what you do in tough times. One of the root causes of the city's budget crisis has been its reliance on emotional decision-making instead of rational thought. A good example is the council's failure to support raising the city's transit occupancy tax (TOT), which is applied to the hotel bills of the city's visitors.