A Bad Deal for East Los Angeles
California is facing a historic budget deficit. The last thing taxpayers need is to waste money on a study that will not reveal any information we don’t already know.
A bill now before the State Senate to assess the economic viability of incorporating East Los Angeles is expensive and fundamentally flawed. It will cost taxpayers nearly $6 million, jeopardize union jobs, and skates so close to the ethical line that it will almost certainly face legal challenges.
Every study shows incorporation will create an immediate, multi-million-dollar budget deficit which East Los Angeles residents and businesses would have to close by paying higher taxes, slashing vital community programs, or outsourcing services to private, possibly non-union, contractors.
Either way, East Los Angeles residents and businesses will pay more.
Marlon Baker
Here are the Facts
What will this incorporation plan cost taxpayers?
This plan will cost taxpayers nearly $6 million and would not be completed until December 2026. The Local Agency Formation Commission for the County of Los Angeles (LALAFCO) – the agency that would conduct the analysis – strenuously opposes this bill saying, “It makes no sense.”
This costly and poorly crafted plan is a waste of precious taxpayer dollars at a time when the State is facing a historical budget deficit. This $6 million should be spent improving the lives of East Los Angeles residents and business owners right now – filling potholes, repairing sidewalks, replacing streetlights, building more affordable housing, and funding youth, senior, and veteran programs to name a few.
What’s in this incorporation plan?
This current plan fails on two fundamental levels: accountability and transparency. It ignores repeated studies that have concluded that East Los Angeles does not generate enough tax revenue to make incorporation economically viable.
This plan requires the State to create a new, 11-member State Task Force to conduct a two-year study to determine the economic viability of incorporating East Los Angeles that comes with a hefty $5.8-million price tag. It doesn’t specify who will be on this Task Force or what financial or planning experience they are required to have to ensure they make an informed decision. Nor does it identify what data this Task Force plans to gather or what criteria it will use to analyze it.
It also skates dangerously along the ethical edges that would compromise the bill’s legitimacy and raise significant legal questions. This bill asks the Local Agency Formation Commission for the County of Los Angeles (LALAFCO) – the agency that would be responsible for conducting the analysis – to assemble, review, analyze, and then make a recommendation on this same proposal – an inherent conflict of interest and inappropriate conduct for any public agency that will almost certainly open the door to future legal challenges.
AB 2986 also bypasses the State’s established procedures for incorporation, which would set a concerning precedent that the County’s other 110 unincorporated areas could follow. AB 2986 circumvented this incorporation process, which requires every incorporation initiative collect petition signatures of roughly 25 percent of area residents. If AB 2986 is approved, the County’s other unincorporated areas could use it as a model to subvert the LALAFCO process again in the future.
One of Task Force’s biggest red flags is its lack of independence. This bill does not guarantee any independent oversight in how members would be appointed and what outside influence it would allow members to have on the study’s outcome. There is also no requirement that local residents or unions get a seat at the table. A majority of the people who live and work in East Los Angeles could get shut out.
Compare this to the 2021 County’s Redistricting Commission, which was a model of independence. This Commission required at-large members to be chosen by a lottery and that there be no specifically appointed members by elected officials.
None of these guardrails against potential conflict of interest exist with this incorporation bill, which refutes proponents’ claims to adhere to the “will of the people.”
What would it cost East Los Angeles residents and businesses?
The last analysis of the economic viability of incorporation in 2012 showed that if East Los Angeles was incorporated, in the first year alone it would run a $19-million deficit. That deficit would be significantly higher today given that costs for every public service have grown since. Sheriff’s Department and Fire Department costs, for example, have increased 66 percent and 59 percent, respectively, over the last year alone.
That means if this bill becomes law these multi-million deficits will have to be paid either by hiking taxes on residents and businesses or by slashing such vital community programs as law enforcement, fire services, libraries, housing, parks, animal control, and graffiti removal.
Services could also be outsourced to private contractors, which would result in a loss of good-paying union jobs, which is why unions have lined up to oppose this bill.
Roughly 27 percent of East Los Angeles residents work in the government, and 42 percent work in the services industry. That means that nearly 70 percent of residents are represented by a labor union. The projected budget deficits could force East Los Angeles to outsource jobs at a lower rate, which could mean slashing union jobs.
Who opposes this incorporation plan?
This plan will cost taxpayers nearly $6 million, will take two years to complete, will burden East Los Angeles residents and businesses with an immediate, multi-million-dollar budget deficit they will have to close by either paying higher taxes or slashing vital programs, will likely lead to the loss of good-paying union jobs, and is so riddled with ethical conflicts that it will almost certainly face legal challenges.
That’s why dozens of State and County unions, every member of the Los Angeles County Board of Supervisors, a majority of Los Angeles County’s State Assembly delegates, LAFCO – the agency that would be tasked with conducting a fourth economic viability study – and hundreds of East Los Angeles residents and community organizations have united to oppose this incorporation plan.
Unions united against this bill include: SEIU 721; the co-chairs of the County Coalition of Unions – the Association for Los Angeles Deputy Sheriffs (ALADS) and the Los Angeles County Firefighters Local 1014; the Los Angeles County Probation Officers’ Union – AFSCME Local 685; California Association of Professional Employees (CAPE); the Union of American Physicians and Dentists (UAPD); the Professional Peace Officers Association (PPOA); as well as our union brothers and sisters from SEIU 2015; IBEW Local 11; Unite Here Local 11; and LiUNA Local 300.
Who opposes incorporation
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Unions Oppose Incorporation
Local Businesses Oppose Incorporation
- Alma Family Services Opposes Incorporation
- Bienestar Opposes Incorporation
- East LA Boys and Girls Club Opposes Incorporation
- Nuevo Amanecer Opposes Incorporation
- Fideicomiso Comunitario Tierra Libre Opposes Incorporation
- East Area Progressive Democrats Opposes Incorporation
- Pacific Asian Consortium in Employment (PACE) Opposes Incorporation
Community Leaders Oppose Incorporation
- Jovenes Opposes Incorporation
- Los Angeles County Hispanic Managers Association Opposes Incorporation
- Monsignor John Moretta – Resurrection Church Opposes Incorporation
- Ricardo Mendoza – Coalition for Responsible Community Development Opposes Incorporation
- Maurice Ramirez – Domus Opposes Incorporation
LA County Opposes Incorporation
A brief history of East Los Angeles incorporation
This is now the fifth attempt to incorporate East Los Angeles. Every previous study of incorporation has reached the same conclusion: East Los Angeles does not generate enough tax revenue to make incorporation economically viable, which is required by state law, and that incorporation would create an immediate, multi-million-dollar budget deficit.
A 2012 comprehensive finance and fiscal analysis by the Local Agency Formation Commission for Los Angeles County (LALAFCO) showed that East Los Angeles does not generate sufficient tax revenue to sustain cityhood, as California law requires. The analysis showed that in the first year alone, East Los Angeles would run a $19-millon deficit.
That deficit would be significantly higher today given that costs for every public service has grown since. Sheriff’s Department and Fire Department costs, for example, have increased 66 percent and 59 percent, respectively, over the last year alone.
A decade of county investments
Over the last decade Supervisor Hilda L. Solis, who represents the First District, has helped direct more than $500 million to East Los Angeles. These include:
- $30 million to the Department of Parks and Recreation
- Over $18 million to the Fire Department for fire protection and emergency services
- $54 million each year to the Sheriff’s Department for law enforcement and public safety
- $150 million for infrastructure projects
- $26 million for maintenance operations
- Almost $260 million to build 17 new affordable housing facilities with 875 new units
- $32 million dollars in rent relief for vulnerable families
- Providing 600 families with tenant-based housing vouchers; and
- Providing over 5,600 households with legal services to prevent evictions
- $102.8 million annually for municipal services for operation and maintenance
- $20 million in Community Development Block Grants for small businesses, seniors, and low-income residents
- $50 million in COVID relief
English Fact Sheet
Spanish Fact Sheet
A better solution
Fortunately, there is a more accurate, less expensive, and more transparent alternative to this incorporation proposal that will deliver results in 120 days – not two years – and ensure our union partners are part of the process.
The Los Angeles County Board of Supervisors last month directed every County department to conduct a year-by-year analysis of every dollar spent on every program and service in the East Los Angeles community. When this analysis is complete, the Board will share every Excel-sheet line item with the people of East Los Angeles.
The people of East Los Angeles have made it clear they want a seat at the table to get the representation they deserve. That’s why the Board of Supervisors is also working to form a special East Los Angeles Town Council or Municipal Advisory Committee to provide residents with a dedicated platform to partner with and advise on all issues related to City Terrace communities.
We need to listen to history and not spend money on another costly study to ensure we make the most informed and accurate decisions to build a brighter future that lifts every member of the East Los Angeles community.
Take action!
Your voice matters. Don’t wait! Take a stand.
Add your name to the growing list of supporters saying no to higher taxes, decreased services, and fewer union jobs.
Sign this petition, and add your name to the growing list of residents who want to protect East Los Angeles.
Send a letter to let your representative to let them know incorporation is a bad idea for East Los Angeles.
Together, we can create change!
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