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[ LA WATCHDOG ](https://mail.citywatchla.com/la-watchdog)
# LA City Budget: Trouble Ahead
March 13 2023
Written by Jack Humphreville.
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LA WATCHDOG - The Controller’s charter mandated [Revenue Forecast Report](https://controller.lacity.gov/revenueforecastfy2024.pdf) projected General Fund revenues of $7.56 billion for the upcoming fiscal year that begins on July 1, essentially equal to the anticipated revenue in the CAO’s June Budget Outlook.
\[Note: This revenue projection assumes a “soft landing” for the economy. If there is recession, all bets are off.\]
Left unanswered is the cost of achieving the Mayor’s goal of moving 17,000 homeless individuals off our streets and into housing. But this is very expensive.
The Mayor’s Inside Safe program will require expenditures of over $600 million a year assuming a cost of $100 per night per hotel room.
Alternatively, permanent supportive housing for 17,000 homeless individuals will require an investment of over $10 billion, assuming a cost of $600,000 a unit, a number supported by a report by former Controller Ron Galperin.
More than likely, these costs will be covered, at least in part, by the proceeds from the Homeless and Housing Solutions Tax that was approved by 57% of the voters in November. This tax on sales of property of $5 million or more is expected to generate between $600 million and $1.1 billion per year.
The Controller’s report also mentioned other issues that need to be addressed, not only in the current budget, but for the longer term.
Today, 20% of the City positions are vacant, hindering the City’s ability to operate efficiently and provide services required by Angelenos. Is there a plan? What is the cost? And will the understaffed Personnel Department be able to execute the plan?
The shortage of manpower is also an issue with the Police Department, especially given the number of early retirements and resignations and the inability to attract new recruits. To achieve full staffing will cost an estimated $100 million.
The Controller also pointed out that inflation will have a negative impact on labor negotiations, putting pressure on the City “to live within its means.”.
There is also the issue of what is the City doing to mitigate Intergenerational Theft, where we dump billions of liabilities on the next generation of Angelenos.
The City also does not have a plan to tackle the deferred maintenance of our streets, sidewalks, parks, the City’s buildings and facilities, and its management information systems. In the past, the ticket for deferred maintenance was estimated to be in the range of $10 billion.
We also have an unfunded pension liability of almost $9 billion (85% funded) and no plan to eliminate this liability. In the past, the LA 2020 Commission recommended the establishment of a pension commission to develop a series of recommendations to fund the two plans and at the same time educate Angelenos. An excellent recommendation for our new mayor.
The City’s “hand to mouth” upcoming budget must be balanced. At the same time, City Hall needs to develop a long term strategic and financial plan that allows Angelenos to understand the City’s goals (homelessness, staffing and labor agreements, infrastructure, pensions) and at the same time eliminate Intergenerational Theft.
This is not an easy task, but a necessary one that is needed to gain the trust and confidence of Angelenos.
*(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate. He can be reached at: .)*
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