By Alex Dobuzinskis
LOS ANGELES (Reuters) - Los Angeles Councilman Eric Garcetti declared victory Wednesday in his bid to become the next mayor and vowed to put the city's economic slump "in the rear-view mirror," capping a race shaped by dire fiscal forecasts and questions about the political clout of organized labor.
Garcetti crossed the finish line of his two-year campaign to lead America's second-largest city with 54 percent of the votes cast in Tuesday's election, defeating City Controller Wendy Greuel, who garnered 46 percent.
He is slated to take office July 1, succeeding incumbent Antonio Villaraigosa, a former labor organizer who has served as mayor for eight years and faced off against the city's unions to implement budget cuts born of the economic downturn. Villaraigosa was precluded by law from seeking a third term.
Political analysts say Garcetti's success may hinge on whether he is able to wring necessary cost-saving concessions from the public employee unions.
He will inherit a city government severely strained by dwindling tax collections from the housing collapse and a prolonged recession of recent years, along with rising public sector wages, pension obligations and other unfunded liabilities. The city's mounting budget deficit is projected to top $1 billion cumulatively over the next four years.
Garcetti has promised to slash city business taxes to help spur economic growth and said he would seek to renegotiate a five-year, 25 percent pay increase he supported in 2007 for most of the city's municipal workers.
"I will focus like a laser on our local economy," he said.
The 42-year-old former Rhodes scholar and policy wonk with a reputation for consensus-building becomes the first elected Jewish mayor of Los Angeles.
His mother is Jewish, and his father, of mixed Mexican and Italian heritage, is former Los Angeles County District Attorney Gil Garcetti, who was the top prosecutor during O.J. Simpson's murder trial in the 1990s.
"I want to thank the voters who believed in the idea that a record of results was worth voting for," the councilman said in his afternoon victory speech, in which he acknowledged "big challenges" facing the city while trying to sound an optimistic chord.
"We are ready to put the recession into the rear-view mirror and to move forward with prosperity once again," he said to cheers from supporters.
Greuel, who was seeking to become the city's first woman elected mayor, congratulated Garcetti in her concession speech.
"This was a hard-fought campaign ... but I want to send a message everyone, that we have to roll up our sleeves and we have to fight for the future of Los Angeles. We have to help mayor-elect Eric Garcetti to make that happen," she told reporters.
The influence of organized labor became a key issue during the race, with Garcetti questioning Greuel's ability to obtain wage and pension give-backs from municipal workers' unions that had contributed heavily to her campaign.
Alluding to the issue in his victory speech, Garcetti thanked voters who he said "believed that an independent mayor was worth voting for, one that would come in welcoming everybody but also untied to any special interests."
But putting aside the rancor of their campaign, Garcetti welcomed Greuel's "gracious and inspiring words this morning," adding, "I know we'll continue our friendship for years to come."
The two liberal Democrats, once allies on the City Council, spent record sums vying for the city's highest office, much of it on a torrent of negative political ads.
Spending by the two candidates reached $23.7 million combined, with outside groups pouring in another $10.4 million in independent expenditures, according to the latest figures from the City Ethics Commission.
The election was marked by low voter turnout, with just over 19 percent of registered voters casting a ballot, according to election figures from the City Clerk's Office.
First elected to City Council in 2001, Garcetti served as council president from 2006 to 2011 and has called attention to his record on environmental initiatives and his role in the urban revival of once-blighted areas in Hollywood, the area he has represented.
Garcetti has pledged to balance the city's budget and to stimulate job growth by expanding on green-tech initiatives such as converting more buildings to solar power and overhauling the city's job-training program.
(Reporting by Alex Dobuzinskis; Editing by Steve Gorman, Andrew Hay and Leslie Gevirtz)