* After recession, aerospace layoffs, earthquakes, fires, and riots, news reports from Los Angeles do not look all bad.

First, this week's bad news: The county board of supervisors has spent a week in hearings looking for ways to cut $686 million out of its yearly budget - nearly a fourth of discretionary funds. (About $3 billion of its $13.1 billion 1993-4 budget must fund everything from jails to parks to lifeguards to emergency rooms.)

Fourteen unions representing much of the county's work force are up in arms, voicing alternative solutions to the budget crisis such as better collection of Medi-Cal reimbursements from the state.

Editorial and opinion pages are all weighing in: "We've all been out in the sun so long that we actually have come to believe that our tax monies are better spent arresting and locking up people ... spending a pitiful few cents on our kids to help them stay good," writes TV personality Huell Howser. "We'll be able to hold the distinction of closing more libraries than any other place in America," he adds. "Shame on us all."

If voters approve a sales tax extension Nov. 2, the county could make up $179 million. The county is soliciting givebacks of $215 million from employees - about a month's pay.

But there is good news, too.

Predictions of dropoffs to tourism revenue - as high as 40 percent after the L.A. riots last year - have not panned out. The area has lost only about $700 millon in revenue, about a 10-percent drop. Record numbers of foreign tourists are coming to the US this summer - 46.5 million, spending $76.9 billion.

Since the tourism industry employs about 390,000, the figures are a relief to local officials.

The troubling sidenote for tour operators is that the decline in Japanese travelers continues. They fell from 30 percent of foreign visitors in 1986 to 19 percent last year, according to the Los Angeles Convention & Vistors Bureau.

David Friedman, a fellow at the Massachusetts Institute of Technology Japan Program, says the 1992 riots may have permanently damaged the image of Los Angeles in Japanese eyes. The falloff has decimated local tour operators in the city's Little Tokyo section.

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