L.A. budget chief warns of bankruptcy without tax hikes, layoffs

Los Angeles' top budget official raised the specter of bankruptcy Friday in a sweeping report that calls for new taxes, possible layoffs and the privatization of some city services.

Chief Administrative Officer Miguel Santana said rising employee costs combined with flat-lining revenues have left the city in a precarious position. Even after reducing its workforce by 4,900 positions in recent years, the city faces a $222-million budget shortfall, he said, a figure that is expected to rise to $427 million by 2014-15.

"We're always in crisis mode," Santana said in an interview. "We're always trying to close that shortfall." Without cutting costs and coming up with about $150 million in new revenue, "we're facing the complete devastation of city services, including public safety," he said. Read More