Experts in local government administration say Los Angeles presents an object lesson in how not to run a county. To be sure, not all of Los Angeles's woes are of its own making: a poor local economy (defense cutbacks cost the county 60,000 aerospace jobs) and unfunded federal and state mandates (a whopping $1 billion last year) hit hard. But the real knife in the heart are out-of-control public payrolls.

• In January, the county's chief administrative officer warned that if nothing was done, the county would run a $517 million deficit in fiscal 1996, which begins next month.

• A blue-ribbon task force says the problem is even worse: the county has a $1 billion structural deficit (i.e., the gap between the revenues it brings in each year and the amount it spends without the budget gimmicks that have masked the deficit's size).

• Officials have tried to rely on quick fixes rather than major structural changes which could save money, such as privatization of the local health care system.

But public payrolls -- and the county's inability to say no to unions -- are the main problem, according to a study by the Rose Institute at Claremont McKenna College.

• Yielding to pressure from public employee unions, the county payroll has grown 15.64 percent since 1990 -- compared to only a 6 percent increase in per capita income among county residents.

• If county pay had grown just 10 percent in that time, taxpayers would ave saved $1.7 billion.

• Of the county's 85,000 workers, 1,225 earned more than $100,000 last year and 2,232 earned more than $90,000 -- not including overtime.

• Although the county disputes it, the Rose Institute study found that the county spent 34 cents last year in administrative costs for every dollar of welfare aid it gave out -- compared to 19 cents per dollar in 1977-78.

Among the suggestions for cost savings being made, two stand out: cut the number of county jobs and privatize the health care system.

• Los Angeles employs 9.4 workers per 1,000 county residents, compared to just 6.4 employed in San Diego County.

• lThe county should be able to combine or cut inefficient departments, reward good workers and punish bad ones.

• While more than one-half the beds in county hospitals went vacant last year, the country subsidized the hospital system to the tune of $434 million.

• The county could close non-productive facilities.