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Out of Spotlight, L.A. Still Hurts

One lesson from the earthquake: The middle class may be the hardest hit and least prepared to recover

(Page 2 of 2)

``Literally every resident of the [San Fernando] Valley has a story,'' says one Los Angeles Police Department officer. ``And sometimes I feel like I've heard them all.''

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Such a process of community catharsis needs to play itself out away from the national spotlight, say many officials, who acknowledge there are good and bad sides to losing that attention.

``Staying off NBC Nightly News and page one of the New York Times is good in that this community needs to get on with life,'' says Kyser. He notes that less national exposure also aids the $8.2 billion tourism industry - with about $23 billion in income from related industries - which had been on the mend after the 1992 riots here - but now has dropped off 3 percent to 5 percent in recent weeks.

``But it's bad in that the rest of the state and country has to stay with this thing to full recovery and learn lessons for the next disaster,'' he says.

That recovery received a boost last week as the US House of Representatives approved $8.6 billion in emergency aid for southern California, the largest relief package in American history. It is being considered by the Senate this week.

But state measures from sales-tax increases to bond measures are steeped in controversy and political debate because of a touchy election year for embattled Gov. Pete Wilson (R).

A statewide, quarter-cent sales tax hike was passed quickly after the 1989 Loma Prieta quake that caused much damage in northern California.

``The governor hasn't ruled anything out but at this point feels it would be wiser to try bond measures rather than tax increases,'' says Wilson spokesman Paul Cranhold. A tax increase in Wilson's first year proved disastrous and was blamed for an increased business exodus from the state and a precipitous fall in his public approval rating.

That rating has shot up since the earthquake amidst widespread kudos for the governor's performance in demonstrating concern and for successfully soliciting federal aid.

``Who is going to pay for this disaster is still being sorted out,'' adds Kyser, ``but the price tag will be somewhere between $15 billion to $30 billion.''

AT last count, insurance firms will foot $2.5 billion of that in claims from the Northridge-centered quake, making it the most expensive quake in US history and the third costliest disaster. Major carriers are expected to have no financial problems after payouts, but smaller companies may fail, analysts say.

The 200,000-plus claims filed so far are believed to be behind renewed pushes for the federal government to assume risk in covering natural diasters.

One emerging lesson, say several observers, is that the middle-class may be the hardest hit and least prepared to recover. ``The top 20 percent of the population has enough money to take care of their problems and the bottom 20 percent gets help from the government,'' acknowledges Richard Close, president of the Sherman Oaks Homeowners Association. Because many middle-class homeowners earn too much to receive grants yet are too deep in debt to assume a government loan, ``it's the 60 percent in the middle that nobody is addressing,'' Mr. Close says.