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Los Angeles is on the verge of bankruptcy. A major stand off this week between mayor Antonio Villaraigosa and the LA City Council over the city’s budget, has resulted in some city agencies being shut down two days a week. Union leaders are challenging the mayor’s authority to effectively reduce city employee paychecks by two-fifths. Losses in tax revenues, combined with increasing payrolls, and additions to the LAPD, have forced the city into a structural deficit, making it rely on periodic infusions of cash. A promised payout of $73 million from the Department of Water and Power this month was expected to close the latest budget shortfall. However, when city councilors refused to approve a rate hike to in part to reduce LA’s reliance on coal-powered energy, the DWP refused to hand over the funds, leaving the city in a bind. City Controller Wendy Gruel has warned that without the DWP’s infusion of cash, the city has only enough money to cover expenses for a few more weeks. The total budget shortfall for the fiscal year could be as high as $290 million.

GUEST: Jessica Levinson, Director of Political Reform at the Center for Governmental Studies, Adjunct professor at Loyola Law School, teaching campaign finance law

Read about the crisis on the LA Times:

Los Angeles mayor responds to pressure, says city service shutdown only a last resort:
http://www.latimes.com/news/nationworld/
nation/wire/sns-ap-us-la-city-budget,0,4921439.story

L.A. council members seek more power over DWP:
http://www.latimes.com/news/local/
la-me-la-budget8-2010apr08,0,101165.story