Hahn Fears Impact of Cuts on His Proposals

Outlining his goals for the new year, Los Angeles Mayor James K. Hahn acknowledged Wednesday that the state’s budget crisis could hamper his efforts in several key areas, including public safety and business tax reform.

The mayor told about 150 members of the Central Cities Assn. that he will continue to push for a revitalized downtown, more affordable housing and a stronger police force. He also said he will look for new ways to make city departments more responsive.

But the state’s budget problems could have a profound effect on his plans this year, the mayor said. Under Gov. Gray Davis’ current state budget plan, the city stands to lose $70 million this year and $175 million next year.

“It makes it impossible” to undertake his varied plans and proposals, Hahn said after his lengthy lunchtime speech to the downtown business group.

Politically, the state’s budget problems could be harmful to the mayor. Hahn made numerous promises to voters in his successful campaign to defeat two secession measures on the November ballot.

“Nothing could be worse” than the prospect of having to renege on those promises, Hahn said after his talk.

At a speech last month to the Valley Industry & Commerce Assn., for example, the mayor said reforming the city’s byzantine business tax code was a priority. Wednesday, he said: “I think it is in jeopardy.”

In recent weeks, Davis has moved to sharply cut state spending and raise taxes to deal with what he announced was a budget gap of nearly $35 billion over the next 17 months.

Members of the City Council’s budget committee were warned Wednesday that the city is facing layoffs and service cuts in the wake of the state budget crisis. Even fire and police services -- departments usually protected from trims -- will feel the , city accountants said.

As a result, City Administrative Officer Bill Fujioka said he is asking all department managers to immediately come up with ways to reduce their budgets by 7%.

“We are asking for a hard hiring freeze, and that includes police and fire,” Fujioka said. “There will be some very significant service cuts, and also some layoffs.”

Also concerned is Police Chief William J. Bratton, who said earlier Wednesday that he is worried about the impact of deficits and shortfalls both in the state and federal budgets. He said that 900 of his officers are paid using federal funds and that he is seeking to ensure that money remains intact. He said his budget team is working on the assumption that it may have to do more with less.

Meanwhile, Hahn said that boosting the ranks of the Los Angeles Police Department remains a priority and that he is eager to continue filling police academy classes. He said he and Bratton will lobby lawmakers and federal officials next week in Washington to ensure continued -- and new -- support.

Hahn said it would be “a huge, huge hit” if he has to freeze the hiring of police officers and firefighters.

The mayor also said he is proceeding with his plans to decentralize local government, creating new mini-City Halls in several regions, and making it easier for residents to obtain and access city services.

The mayor was well-received by corporate and other business leaders, although several said they long anticipated that reforming the business tax code could be at risk. Carol Schatz, president of the Central Cities Assn., said business leaders have long complained that the tax code is uneven and places unfair burdens on them.

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Times staff writers Tina Daunt and Richard Winton contributed to this story.