City Controller Wendy Greuel on Tuesday released her economic forecast for the cash-strapped L.A. city budget next fiscal year and, as expected, it wasn't pretty: Revenue is expected to drop $141 million, the city will have to borrow $550 million to shore up its cash flow, and $399 million in debt payments, 59 percent more than they were 10 years ago, will come due.
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The news came as the city faces a $212 million deficit this fiscal year and an additional $485 million expected to hit July 1, when the next fiscal year starts. "While we believe that the City will see a modest economic recovery in the coming year, it would best be described as slow and gradual," Greuel stated. "Overall, we expect the City to receive $6.146 billion in revenue next year, which is $141 million less than the $6.287 billion the City is expected to receive this year."
While she sees the need for deep cuts, the controller urged the Los Angeles City Council to be judicious in its use of layoffs, arguing that cutting employees in revenue-generating departments would be like the city shooting itself in the foot.
"The city needs to first identify which specific core functions it plans on providing to Angelenos and then shift our resources to meet those needs, not the other way around," Greuel stated. "For instance, furloughing or laying off employees in revenue generating positions seems counter-productive as the city explores opportunities to generate additional revenue. The services provided by city government should not be driven by what positions employees were able to transfer into, but by a clear policy on the city's priorities given the current - and looming - budget deficits."
Well said, but "clear policy" is not exactly the City Council's middle name.