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Analyst: City of L.A. Faces Budget Deficits Through 2018

Lawmakers won't have the money to rebuild services cut during the recession until the 2018-19 fiscal year, unless new tax revenue is found or other programs are cut, says Miguel Santana.

Los Angeles is facing years of budget deficits, says an analyst. Patch file photo.
Los Angeles is facing years of budget deficits, says an analyst. Patch file photo.

Los Angeles faces budget deficits through 2018 even if elected officials keep a lid on spending and secure new concessions from the workforce, the top financial analyst at City Hall warned in remarks published today.

In a memo to the City Council, City Administrative Officer Miguel Santana said lawmakers won't have the money to rebuild services cut during the recession until the 2018-19 fiscal year, unless new tax revenue is found or other programs are cut, the Los Angeles Times reported. That year, the city is expected to experience a $20.9-million surplus, he said.

The situation could limit Mayor Eric Garcetti's ability to expand core services during his four-year term. Garcetti has promised to take a "back to basics" approach to city government, proposing a budget with modest hikes.

Deputy Mayor Rick Cole said Garcetti is working on ways to generate savings for the city that offset Santana's projections in future years, The Times reported. The mayor is focusing on limiting workers' compensation costs, improving the city's purchasing process and increasing productivity through technology, he said.

Santana released his budget memo three days after Garcetti proposed his first spending plan, which is designed to eliminate a $242 million shortfall for the fiscal year that begins July 1. The council must decide whether to approve or rework Garcetti's 2014-2015 financial plan next month.

Even after a budget is passed erasing next year's revenue shortfall, more deficits will follow due to rising employee costs, Santana's memo said, The Times reported.

Santana projected a $165.2 million deficit in 2015-16; a $186.8-million deficit in 2016-17; and a $73.9-million deficit in 2017-18, according to the newspaper. Each of those figures assumes that the council will approve Garcetti's gradual reduction in the top business tax rate over the next four years.

--City News Service


Don April 19, 2014 at 10:22 AM
They gloss over it and don't give you the pragmatic, dig the grave numbers up front. Those are, a $30 billion dollar pension fund under-funding as a result of the politicians giving your money away to public sector employees who don't "give a sh*&" about you. Now it your turn to take it back and say no. Bankruptcy takes the hemming and hawing away from the politicians who have no real incentive to manage your money in the fiduciary responsibility they are supposed too. Yes, bankruptcy and we stop the bleeding and you get your city back
Robert Yaffe April 19, 2014 at 02:17 PM
To offset the deficit. Remove the illegal alien children from the schools .They are costing Los Angeles schools $40,000,000 school lunches and schooling 1.3 billions dollars yearly
Allan April 19, 2014 at 04:22 PM
Don, I have advocated just that and been whispering it into Wendy Gruel's ear before she even became controller. It was a problem way back then. Should have done it back a few years and the city would be on the way to recovery. You know this is going to be a prelude to the raising of taxes or maybe raising parking to 5.00 an hour.
Don April 21, 2014 at 09:03 AM
What they don't tell you is how they make up that deficit each year. Cut back in services Mortgaging City assets to pay back tomorrow for today's bad management LA county mortgaged assets in the 90's-350 major buildings. We're still paying off yesterday today
Chris B April 21, 2014 at 10:44 PM
Mr. Santana also said that the last budget would not work unless there were layoffs of city employees or a 1/2 percent sales tax. There was not a sales tax increase, and, no layoffs happened. "Cry wolf" too many times, and we don't believe you. cb

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