Los Angeles Mayor Antonio Villaraigosa spoke at a meeting of the Valley Vote organization last night in the San Fernando Valley. He's not the governor and I didn't ask him if he was running for the job, but as we walked out of the meeting I did ask him how he would handle the current state budget mess.

Villaraigosa responded: "I've said for some time the state budget deficit is a spending problem but it's also a revenue problem. There are very real structural elements to it. The only way to resolve this budget deficit is to cut some spending and also to raise revenues and that's what we're doing here with the city budget. We're saying for every $1.50 in cuts we are going to raise a dollar in revenue."

My thoughts: Using that formula on a $20 billion state budget deficit problem would mean a combination of $12 billion in cuts and $8 billion in tax increases. Scary numbers. Yes, I know that is a static calculation and that's not what the final numbers would be, but a one-and-a-half to one ratio still means a large tax increase in a tough economy. I don't think the voters buy it and we know the Republicans in the legislature won't. The economic ripples from a large tax increase would not be good for the state economy.

I also asked the mayor about Los Angeles' reputation for being bad for business.

"I think historically the city has been hostile to business," he agreed. Then he went on to say what his administration was doing to correct the problem.

In a year when Los Angeles faces the largest budget deficit in its history, Villaraigosa said the city will not backtrack on its commitment to cut business taxes. He is going to meet the third year installment of business tax reform.

There has been progress in Los Angeles on tax reform, perhaps not enough, but Villaraigosa is certainly going in a positive direction. What government officials and bureaucrats need to understand is that correcting the tax system and/or relieving a heavy tax load could be just the ticket for improving the business climate and bringing in more revenues. Villaraigosa's effort to move ahead with tax reform even in small increments is a good thing.

The mayor also talked about reducing the number of departments to get building permits from twelve to two, focusing on doing a better job keeping film production in the city, and improving tourism, which he said is at an all-time high.

Villaraigosa was warmly greeted at the organization that he opposed when Valley Vote led the campaign to secede the San Fernando Valley section of the city from the City of Los Angeles in 2002. The measure passed in the Valley but lost city wide so the secession effort failed. (Villaraigosa wasn't in an elected office at the time and, for the record, I was a paid consultant to the Secession campaign.)

By the way, one of our blogging Hounds, Dr. Keith Richman, was elected by the Valley voters as mayor of the new city .... If there had been a new city.

The leaders of Valley Vote gave Villaraigosa credit for paying more attention to the Valley than many of his predecessors, including providing a greater police presence.

He took many questions from the audience. He talked of wrestling with the city budget and proposing to lay off 350 workers as well as cutting empty positions on the city job roll. He also talked about consolidating the gang programs in L.A. which he said were too spread out to be effective. He said the way the city spent money on gangs was like spreading peanut butter over the entire city instead of concentrating on serious problems in target areas.

It was a solid performance in front of an audience which he acknowledged didn't always agree with him.