McKeon and the Orange County Democrat served together in the House of Representatives from 1997, after Sanchez was elected, to 2015, when McKeon retired. For six years, McKeon was the top Republican on the House Armed Services Committee, which Sanchez still sits on.

“I have worked closely with Loretta for many years and have seen firsthand her ability to put partisanship aside and work with Democrats and Republicans to help move policies forward that better protect our troops and the homeland,” McKeon said in a statement. “Her military knowledge and committee experience is needed in the Senate.”

Because of her longtime seat on the Armed Services Committee, many of Sanchez’s biggest accomplishments have been military related, including changing how sexual assaults are treated in the military.

Path to victory

Sanchez hopes to win the Senate seat being vacated by Democrat Barbara Boxer with a coalition of Latinos, Republicans, independents and the leftover Democrats who don’t support the establishment candidate and front runner, Attorney General Kamala Harris.

In recent months, Sanchez picked up notable right-leaning endorsements from popular conservative radio host Hugh Hewitt, the former Republican mayor of Los Angeles Richard Riordan, and the Libertarian-leaning editorial board of the Orange County Register.

Polling favors Harris

Harris led Sanchez in the primary, 40 percent to 19 percent, with the results split among 34 candidates. Polling since has consistently shown Harris with a comfortable lead.

A Public Policy Institute of California poll released last week showed Harris leading Sanchez by 18 percentage points, with 28 percent of respondents saying they’d skip the race entirely and 14 percent (largely Republicans) responding they were undecided.

Of her four key voting blocs, Sanchez only leads among Latinos. Harris leads among Republicans, independents and Democrats. 

Good morning! Happy Monday.

New polling and a surprise endorsement light up the path to victory for Loretta Sanchez’s quest for the U.S. Senate — but both also illustrate the challenges ahead.

Sanchez — a Democratic congresswoman from Orange County — is hoping to cobble together enough votes from a mix of Latinos, Republicans, independents and Democrats to carry her past Democratic Attorney General Kamala Harris, the frontrunner.

Harris won first place in the June primary by a wide margin — 40 percent to 19 percent — with the vote split between 34 candidates. Polling released Friday gives a clearer picture of how the two candidates stack up head to head, showing Harris in a comfortable, yet surmountable, lead.

And while the polling suggests Sanchez still faces significant difficulties winning over Republicans, Hugh Hewitt, a popular conservative radio host from Orange County, endorsed her on his show on Thursday, giving Sanchez her second high-profile Republican endorsement since the primary.

CalWatchdog has more:

In other news:

• Speaking of high-profile endorsements in the Senate race, Vice President Joe Biden is considering endorsing Harris. The Los Angeles Times has more. 
• The Voice of San Diego dissects Assemblywoman Lorena Gonzalez’s decision to present her boyfriend an award for Veteran of the Year, finding trouble with the decision and hypocrisy with the reaction. 
• A new report finds the use of “dark money” dipped in California recently, reports Capital Public Radio.
• “Facing a torrent of accusations, a for-profit company that operates taxpayer-funded online charter schools throughout California has reached a $168.5 million settlement with the state over claims it manipulated attendance records and overstated its students’ success,” writes The San Jose Mercury News. 

Legislature:

• Gone ’til August.

Gov. Brown:

• On vacation.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New followers: @Sal_DiCiccio @dandelcampo2

Signaling the depth of California’s uncharted political waters this election season, Richard Riordan, the Republican ex-Mayor of Los Angeles, endorsed Rep. Loretta Sanchez, D-Calif., to replace outgoing U.S. Senator Barbara Boxer. Calling her an “independent thinker,” as the Sacramento Bee noted, Riordan helped fuel Sanchez’s strategy — born of necessity — to rally Republican voters against her powerful opponent, state Attorney General Kamala Harris. Driving the point home, Sanchez vowed to “work with leaders across the aisle” in the Senate should she manage to defeat Harris. 

In a sign of momentum among notable California Republicans, influential radio host Hugh Hewitt followed Riordan’s endorsement by throwing his support behind Sanchez, the first Democrat for whom he has done so. 

Though Riordan has sustained a reputation as something of a maverick within his own party — having endorsed both Dianne Feinstein and Barack Obama — his endorsement of Sanchez came with a harsh assessment of Harris’s “crazy” ideology. “Riordan cited a case in 2008, while Harris served as San Francisco district attorney, when a recently convicted cocaine dealer, Alexander Izaguirre, avoided prison after being accepted into Harris’ ‘Back on Track’ jobs program,” the Los Angeles Times reported. “Izaguirre, an immigrant, was in the U.S. illegally. He later stole a woman’s purse and then drove into her with an SUV.”

A difficult balance

The anecdote perhaps unintentionally underscored Sanchez’s challenges in courting Republicans to make up for lost Democrats in her continued bid against Harris. “If Sanchez, a 10-term congresswoman from Orange County, wants to boost her chances of winning in November, she will probably have to do so by forming an unusual coalition of Latinos and Republicans,” the Washington Post noted. “That could be challenging in a year when Donald Trump, whose derogatory comments toward Latinos are widely known, will be at the top of the ballot.” On the other hand, widespread disillusionment with the Trump campaign among many moderate California Republicans — and even some conservatives — could help limit that adverse effect. 

Then again, some research has strongly suggested that not all anti-Trump Republicans can be counted on to line up behind Sanchez, who is generally acknowledged to be closer to the center on many issues than Harris. “In a Field Poll survey a week before the primary, Republicans were split when asked which Democrat they would vote for in November,” the Post added, with 26 percent voicing an interest in Harris and just 25 percent for Sanchez. “Thirty percent of GOP voters volunteered that they would vote for neither.”

Down to turnout

Mere apathy has been cited as yet another problem facing Sanchez, who did not quite hit half of Harris’s 40 percent support in the primary vote. “If Sanchez tries to spike Latino turnout by aggressively going after Donald Trump, she will probably lose the Republicans. If she stays agnostic on the presidential race, Latinos may lose enthusiasm for her campaign. While Sanchez doesn’t have to worry about losing too many Republican votes to Harris, she should worry about Republicans leaving their ballots blank,” John Phillips observed at the Orange County Register. As Republican consultant John Thomas warned, Phillips concluded, driving those already disaffected voters to the polls could well require a greater investment of resources than Sanchez is capable of raising and making. 

The difference, according to some close analysts, could come down to November’s general-election turnout dynamic. “When there is a much larger electorate, with perhaps 1 million more Latino voters statewide, how will Harris fare if she continues to lose the Latino vote to Sanchez by wide margins? This deficit for Harris could prove to be a critical advantage for Sanchez,” argued Adrian Pantoja, Senior Analyst for Latino Decisions, at the Huffington Post. The “new data on Latino voting strength for Sanchez may provide possible donors with a reason to invest in the second-place finisher, especially against the backdrop of possible record Latino turnout in November when Donald Trump is on the ballot,” Pantoja concluded. 

Sanchez — a Democratic congresswoman from Orange County — is hoping to cobble together enough votes from a mix of Latinos, Republicans, independents and Democrats to carry her past Democratic Attorney General Kamala Harris, the frontrunner.

Harris won first place in the June primary by a wide margin — 40 percent to 19 percent — with the vote split between 34 candidates. Polling released Friday gives a clearer picture of how the two candidates stack up head to head, showing Harris in a comfortable, yet surmountable, lead.

And while the polling suggests Sanchez still faces significant difficulties winning over Republicans, Hugh Hewitt, a popular conservative radio host from Orange County, endorsed her on his show on Thursday, giving Sanchez her second high-profile Republican endorsement since the primary.

Polling

To win, Sanchez will likely need around a third of Democrats, the vast majority of Latinos and more than half of independents and Republicans to cast their ballots for her.

A Field Poll released Friday showed Harris with a 15-point lead (39 percent to 24 percent). The good news for Sanchez was that 22 percent of respondents were undecided, the bad news was that 15 percent — a large portion of which were Republicans — said they’d vote for neither.

Harris led among voters in nearly every category, including among Republicans, independents and Southern California voters (Harris is from the Bay Area).

Sanchez, however, had a strong lead among Latinos, a nice lead among voters ages 18 to 39, and a slight lead among voters making less than $40,000 annually.

Republicans

Perhaps the most troubling data point for Sanchez was the 31 percent of Republicans who said they wouldn’t vote in the Senate race, essentially saying they would just skip over that race on the ballot without one of their own to choose from.

Mike Madrid, a Republican consultant who specializes in Latino issues, said he doubted the Republican undervote will be as “significant as other Democrat demographics” and believes Sanchez has a chance to win in November.

“I think there’s a very real shot,” Madrid said. “Difficult, certainly; but absolutely possible.”

Fragile coalition

Sanchez walks a fine line in appealing to Latinos and Republicans, as the former is increasingly dissatisfied with the latter.

And she can’t veer too far to the right and hope to win a large chunk of Democrats or vice versa. After all, Sanchez is still a partisan Democrat and has strong support from Democratic lawmakers and constituencies, including unions. 

While some Republican insiders have reached out to Sanchez, introducing her to donors and voters behind closed doors, few are willing to make overt displays of support. 

Endorsements

Republicans like Hewitt who have come out in support of Sanchez give cover to other Republicans who may have a tough time voting for a Democrat by finding her to be the moderate candidate, or at least the lesser of two evils.

The Libertarian-leaning Orange County Register Editorial Board endorsed Sanchez during the primary (while Republicans were still in the race), primarily for voting against the Iraq War in 2003, for voting against the PATRIOT ACT (which expanded the federal government’s use of surveillance against U.S. citizens), and for opposing the 2008 bank bailout.

Hewitt called her the more “moderate” of the two candidates and said he would occasionally find consensus with Sanchez in military and defense issues — Sanchez sits on the House Armed Services Committee and the House Homeland Security Committee. 

“You and I are not going to agree a lot, but occasionally, we’re going to agree on Armed Services and some Defense appropriation issues,” Hewitt told Sanchez on air Thursday. “I’m not going to agree with your opponent ever.”

In June, Richard Riordan, the former Republican Mayor of Los Angeles, endorsed Sanchez for her opposition to the Iraq War and for her ability to work across the partisan aisle to pass legislation. 

Congressional Quarterly recently listed Sanchez as one of the 25 most influential women in Washington, for being a “debate shaper and swing vote.” For the majority of her nearly two decades in Congress, she’s been in the minority party, meaning most accomplishments have been made with an element of compromise.

“I’ve known Loretta Sanchez for many years, she is tough and not afraid to take a stand on important issues,” Riordan said at the time. “(Sanchez) knows how to work with Democrats, Republicans, and Independents.”

Sanchez actually used to be a Republican, dating back to high school in Anaheim. But similar to Latinos today repulsed from the Republican Party by its presumptive presidential nominee, Sanchez switched when she heard former Republican presidential candidate Pat Buchanan warn of the “illegal invasion” of Mexicans coming across the country’s southern border, according to the Los Angeles Times.

Uphill climb

Even if Sanchez can unite behind her Republicans, Latinos, independents and leftover Democrats, she still faces an opponent in Harris who has statewide name recognition and the full backing of the Democratic establishment, which in California has so often proven to be enough. 

For every play she makes for one group, she risks alienating voters of another group. Democratic consultant Steve Maviglio said, for example, attacking Harris, the attorney general, as being soft on crime was a decent strategy, but risks losing appeal among progressives.

And despite Sanchez’s moderate profile as a member of the fiscally conservative Blue Dog Caucus and her independent streak on larger issues, she still has a fairly liberal voting record in the House.

“It’s an uphill climb,” said Maviglio. “What credentials does Loretta Sanchez have to appeal to Republicans? She’s been a partisan Democrat in the House. Is she less liberal than Kamala Harris? Only by a hair. That’s not a convincing argument.”

Basically, his strength is that he’s a Latino candidate who could count on Southern California Latino voters in a presidential election year, which tends to be more Democratic and liberal.

The minus is that Latinos don’t turn out to vote as much as most other major Democratic groups. For example, in the 2012 presidential election, nationwide blacks actually turned out to vote at a larger percentage rate than whites. Some of that was because President Obama is black. But there also were major get-out-the-vote efforts among blacks.

So Villaraigosa  would have to start early, as the Obama campaign did, with a “ground game” to get out voters favorable to him.

The Times article did not note that another problem might be that one primary opponent could be Rep. Loretta Sanchez of Santa Ana. If both ran, the Latino vote could be split.

Villaraigosa also could have a problem with his tenure as mayor, 2005-13, which coincided with the Great Recession, from which Los Angeles only partially has recovered. As former Mayor Richard Riordan explained to CalWatchDog.com in 2012, Villaraigosa’s policies put L.A. at risk for bankruptcy.

The city economy also will be slammed by jobs killed from the minimum wage for hotel workers going to $15.37 an hour. And current Mayor Eric Garcetti wants to kill even more jobs by raising the overall city minimum wage to $13.25 by 2017.

Another recession could tip it over the edge before Nov. 2016, with Villaraigosa getting at least some of the blame for making the City of Angels into Detroit on the Pacific.

Then there’s Villaraigosa’s messy private life, which makes Bill Clinton look like Ozzie Nelson.

It worked, and Davis ended up edging out hopeless GOP hopeful Bill Simon — a bland, cookie-cutter social conservative — in 2002.

Jerry Brown was hardly in the same sad shape as his former chief of staff earlier this year. But he could’ve acted in similarly tricky and mendacious fashion, had he wanted. Carla Marinucci of the San Francisco Chronice was the first to make this point:

“It may be one of the biggest mysteries of the June 2014 primary: why didn’t the California Democratic Party weigh in with money and resources — and ‘pick’ the Republican candidate to go up against Democratic Gov. Jerry Brown in the fall?

“Especially since the choice of Tea Party favorite Assemblyman Tim Donnelly, strategists in both parties predicted, would have helped Democrats, and haunted the GOP and its candidates until November. And since the more moderate former Treasury official Neel Kashkari has the potential to appeal to more independents and crossover voters in November, while possibly helping to lift downticket candidates.

“’The California Democratic Party is sitting on a lot of money,’ and Brown has amassed a $20 million war chest, notes Mike Madrid, the co-director of the USC/Los Angeles Times poll and a longtime California politics watcher.

“’For a very small amount, the party could have launched attacks on moderate Republican Neel Kashkari, and ‘assured that Tim Donnelly was the GOP nominee.'”

Two theories on why the gov took the high road

The gov is no dummy. So here are two theories about why he didn’t pursue this monkey-wrenching:

1) He didn’t think it was honorable. I know this will be laughed off by some, but the Jerry Brown on display for much of the 1990s consistently sounded like a populist idealist who hated coarse politics. If this was in any way genuine, Brown might actually find the idea of manipulating Republican voters to pick his opponent to be distasteful.

2) He didn’t think it would help him, or maybe even California, to have the state GOP be even weaker than it is. It has hardly reached the levels of Bill Clinton, but Brown is a triangulator as well, offering himself as a third point of reference in Sacramento’s political wars between his own free-spending Democrats and allegedly heartless Republicans. He likes the current balance of power.

The possibility that I don’t buy is that the governor didn’t think about manipulating the GOP race. Especially given what Gray Davis did in 2001, it had to have been on his mind.

By Chris Reed

Despite some pension reforms and program cuts, the city of Los Angeles remains in difficult financial shape. A Jan. 24 Fitch credit-rating service analysis says the L.A. economy is rebounding, but that city leaders struggle to find the political will to deal with structural budget problems, and that huge annual deficits will cause headaches for many years to come.

What is a key culprit in L.A.’s financial woes? You guessed it. Fitch says that of the city’s $3.9 billion 2011 general fund budget, nearly 20 percent ($773.5 million) went to fund retirement health care and other post-employment benefits and that nearly 15 percent ($577.4 million) went to city employee and public safety pension funds.

So what are the three key candidates in the March 5 mayor’s race saying they’ll do to deal with the budget and the daunting fact that more than one-third of the city general budget goes to fund public employee retirement benefits?

As this L.A. Times story makes clear, all want to basically duck the topic. Still, at least one candidate, City Councilwoman Jan Perry, knows tough times are ahead, with bankruptcy a possibility.

Wooing cops, firefighters and the SEIU

But two candidates want to make the problem even worse. Candidate Wendy Greuel wants to add 2,000 police and 800 firefighters — a 20 percent increase in a city where crime and fire problems are near modern historic lows. As the city controller, one would think Greuel should know better.

Meanwhile, City Councilman Eric Garcetti, the third major candidate, is in a fight with Greuel to see whom can do the most pandering to the Service Employees International Union, according to a Feb. 5 L.A. Times report:

“[Greuel and Garcetti] offered strong commitments of solidarity with the union representing a major chunk of civilian employees at City Hall, according to recordings of the [candidate interview] sessions obtained by The Times.

“The pledges [were] made last week in a members-only meeting for union workers considering a possible endorsement …

“Greuel … accused city leaders of failing to follow collective bargaining procedures when cutting retirement benefits for future city employees — a complaint being voiced loudly by the SEIU. …

“When it was his turn, Garcetti repeated a pledge to make all of the city’s department heads reapply for their jobs — offering a commitment that city workers would play a role in deciding which managers will remain. …

“The remarks show how much Greuel and Garcetti covet the backing of a union that represents thousands of janitors, trash truck drivers and other blue-collar city workers. If SEIU weighs in on the contest to replace Mayor Antonio Villaraigosa, it could mean hundreds of thousands of dollars and scores of volunteers for a favored candidate.”

Unfortunately for L.A., Greuel is considered the clear favorite, not the far more clear-eyed Perry.

Having lived in Southern California since 1990 and watched the city of Los Angeles go downhill under labor-friendly mayors (Antonio Villaraigosa and James Hahn) and do well under pro-business moderates of both parties (Richard Riordan and Tom Bradley), I’ve wondered when Angelenos would become as pragmatic as New Yorkers.

The same dynamic of mayoral success holds in the Big Apple — pro-business centrists like Michael Bloomberg and Rudy Giuliani have a way better record than labor-friendly liberals like David Dinkins and Abe Beame. And in New York, the heavily Democratic electorate figured this out long ago. When was the last time New York City voters elected a Democrat to be mayor?

All the way back in 1990.

By John Seiler

It looks like only bankruptcy will bring pension reform to Los Angeles. Former Mayor Richard Riordan just dropped his efforts to put San Jose-San Diego-style pension reform before the city’s voters:

“The sudden retreat followed an attack by organized labor on a plan that Riordan said is vital to avoiding municipal bankruptcy. City leaders are coping with a financial crisis and will ask voters next spring for a sales tax increase to avert more cuts. Riordan argued that City Hall should reduce employee pension benefits instead.

“The failure of Riordan’s ballot drive could push the pension issue further into the background of the 2013 mayoral race. Three City Hall insiders in the contest have criticized the plan, while a Republican outsider has embraced it.”

The sales tax likely will pass. Combined with increases in federal and state taxes, the higher city taxes will kill businesses and jobs, in the end reducing revenue. The lower revenue will make it harder to make current pension payments. Then the city will follow Vallejo, San Bernardino, Stockton and Mammoth Lakes in declaring bankruptcy.

By then, Mayor Antonio Villaraigosa will have a cabinet job in the next Obama administration, and his successor will get the blame for the debacle.

Just this month, my colleague Brian Calle wrote on our Web site an article, “Los Angeles teetering on the brink of bankruptcy.” He interviewed Riordan.

The teetering now is even closer to the brink.

Editor’s Note: This is the Tenth in a CalWatchDog.com Special Series of in-depth articles on municipal bankruptcy

Nov. 13, 2012

By Brian Calle

Taxpayers in Los Angeles are facing a major crisis if Mayor Antonio Villaraigosa and other officials do not begin to address the systemic, structural issues putting the city on the fast track to economic upheaval. The situation is similar to that in other California cities such as Stockton and Vallejo.

The tsunami of unfunded pension liabilities and health benefits is about to hit the shoreline of Los Angeles. And if Stanford University’s estimates are correct, Los Angeles is facing roughly $27 billion in unfunded pension liabilities. For a city whose annual budget is in the $7 billion range this year, that figure is daunting.

The Big Budget Picture

Budget gaps are no rarity for the City of Angels in recent years. It seems like an annual tradition. In fiscal year 2011-2012, the city projected a budget shortfall of more than $400 million. For 2010-11’s fiscal year, the tune was the same. As was 2009-10, and so on.

L.A.’s chief administrative officer, Miguel Santana, noted that the budget shortfall is likely to be much greater by 2014-15. “Every year it gets worse,” he said.

The chain of events is always the same. City officials announce a budget shortfall and the mayor seeks to bandage it with gimmicks that fail to address the underlying causes.

Criticizing Villaraigosa’s approach to last year’s budget shortfall, City Controller Wendy Greuel said that ”kicking the can down the road is not a solution when we can anticipate a growing structural deficit in future years.” She was referring specifically to a plan Villaraigosa outlined to borrow money to solve part of the deficit. But her summation applies to the inept budgeting approach of the city for years.

Former Los Angeles Mayor Richard Riordan predicted increased hardships and eventual bankruptcy if drastic action wasn’t taken by city officials. In an editorial he penned in the Wall Street Journal in 2010, he wrote, “Los Angeles is facing a terminal fiscal crisis: Between now and 2014 the city will likely declare bankruptcy.”

Riordan is not shying away from those comments. In a recent phone conversation, he told me that bankruptcy for L.A. could come “as early as next year.”

Ballooning Pension Costs

What has rapidly perpetuated financial woes for the city is that payouts for retirement benefits have increased in recent years, thus crowding out services the city provides. A study released in early April by the Stanford Institute for Economic Policy Research found that, for the city of Los Angeles, “Pension costs increased from 8.5 percent of total city expenditures in 1999 to 13.7 percent in 2011.” For fiscal year 2011-12, estimated pension costs look to have climbed to “15.4 percent of city expenditures.”

Stanford’s study also estimated that each of the city’s three independent pension funds is unfunded by billions of dollars: the city of Los Angeles Fire and Police Pension System is $9.25 billion unfunded; the Los Angeles City Employees’ Retirement System is $11.32 billion unfunded; and the city of Los Angeles Water and Power Employees’ Retirement System is $6.59 billion unfunded.

“In 1999, Los Angeles City’s aggregate annual required contributions for its three systems totaled $291 million, rising to $923 million in 2011, an annual average growth rate of 11.1 percent,” according to the Stanford report.

But here is the kicker: The growth in pension spending by the city “outpaced that of spending on public protection, which grew at 5.2 percent, on health and sanitation (3.6 percent), and on recreation and cultural services (5.8 percent), and it occurred while spending on public assistance programs fell by an average of 3.0 percent per year.”

If the trend continues, the city will be little more than a professional retirement payment and processing service.

Union Power

Economic downturn aside, interminable spending fueled by powerful unions has pushed Los Angeles to the brink of bankruptcy. As Riordan argues, unions basically control the Los Angeles City Council.

For example, “A compensation package negotiated in 2007 irresponsibly guaranteed many city workers more than 25 percent in pay hikes over five years,” according to a Los Angeles Times editorial.

And as the city continues its downward spiral, “most employees represented by the Coalition of Los Angeles City Unions are scheduled for 11 percent increases in compensation over the coming two years,” the Times reported.

One of the ideas for offsetting some of this year’s budget shortfall was to ask city workers to forgo raises. But the union bosses balked at the idea, claiming that city employees had sacrificed enough in recent years.

As for pension benefits, some city employees are able to retire with up to 100 percent of their salaries, a benefit virtually unheard of in the private sector.

Triggering Bankruptcy

“What will likely trigger bankruptcy is when Wall Street stops buying bonds from [the city of] L.A.,” Riordan told me. “Someone will wake up and say, ‘They aren’t going to have enough money to pay off my bonds,’ and that will be that.”

“If you predict ahead three or four years,” Riordan argued, the city will have to “close parks, libraries and cut police and fire services,” similar to what has happened in the cities of Stockton and Vallejo.

Tap Dancing Around Reform

According to KABC, “Mayor Antonio Villaraigosa says the city has cut a third of the general fund civilian workforce” in recent years.

Of course, layoffs will not be enough, and Villaraigosa has argued that city workers will have to assume more costs for their own health care. And he has announced plans for changes to the city’s pension system, including raising the retirement age for new hires to 67 (current workers retire at 55 or 60) and limiting pension benefits so that retirees cannot retire with 100 percent of salary.

Union leaders instantly chastised the mayor for his pension proposals, specifically his plan to raise the retirement age. But frankly, his proposals barely scratch the surface of what’s necessary for fiscal sustainability.

At the very least, a new, less-generous pension plan has to be created for new employees, something like the 401(k) plans private sector employees have. Jan Perry, a Los Angeles city councilwoman and candidate for mayor, told me, “A new pension tier for people not even hired is completely reasonable to pursue.”

Pension expert Marcia Fritz said that all of the city’s employees should pay at least half of pension costs. “This eliminates the employer paid pension contribution and will reduce pension costs as a whole,” she said.

“Another thing L.A. should do,” if bankruptcy becomes reality, “is break retiree health contracts,” she said. “They weren’t prefunded, so are empty promises, and courts have allowed retiree health to be lumped in with other unsecured creditors.”

The best option would be to adjust promised benefit levels for current workers. Some experts believe, as Fritz also noted, that “fiscally distressed agencies may have the ability to adjust benefits for current workers.” She argued that there is a growing precedent that governments can call on employees to increase retirement contributions and suspend cost-of-living increases when municipal or agency funds are at unhealthy levels. Still, these necessarily bold approaches are untested.

Of course, another option to fix the hole would be astronomical tax increases, which would likely only delay real solutions. Riodan balked at the idea, asking, “Can you imagine L.A. quadrupling their taxes? Everyone would flee the city and the state.”

Even with the city’s challenges, as hard is it may be to believe, Riordan contended: “L.A. is better off than a lot of cities” in California and elsewhere. If that’s the case, there is a bumpier road ahead.

Calle is the editor-in-chief of CalWatchDog.com, the investigative journalism bureau of the Pacific Research Institute.