Wednesday, August 17, 2011

LA County Realizes that Destroying Vernon's Economy Might Be a Bad Idea

For months now, Assembly Speaker John Perez has been pushing a bill to forcibly disincorporate the town of Vernon for the benefit of his political allies in Los Angeles County. The impetus for this move has, until recently, been crystal clear: with its own public utility and a large tax base comprised of hundreds of manufacturing and processing firms, Vernon has always been viewed as a extremely wealthy city, and perpetually broke LA County wants its money. Yet an LA Times report last Sunday blew an uncomfortable hole in this scenario, revealing that Vernon has accumulated hundreds of millions in debt after years of ill-advised investments. Right on cue, the county's Board of Supervisors is wondering if they should call the whole thing off.

According to the Times, the supervisors have ordered a lightning-quick audit of Vernon's finances, and will meet next week to discuss its findings. Ultimately, the supervisors will have to decide whether they will, in fact, oppose AB 46. According to Supervisor Zev Yaroslavsky, Vernon's debts might mean that the bill is "booby-trapped" and "that we would have no capacity to deal with" its problems. If the board comes down against the disincorporation, it's unclear who will be left to support it, with the city's businesses, labor unions, and political leadership firmly opposed.

The board's about-face is just another reminder of why Vernon businesses have no interest in operating within an unincorporated part of Los Angeles County. It's stunning to us that the county hasn't done its homework on this issue until now; Vernon's debts, after all, were uncovered by an auditor hired by the LA Times. We're not surprised that they don't realize that AB 46 will shrink the town's tax base by driving scores of businesses away, but did they really think it had no debts? By the look of things, yes.


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