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LA WATCHDOG - Between this year’s supposedly balanced budget and the City’s continuing Structural Deficit, the City’s budget and finances are in a world of hurt.
On April 20th, Mayor Bass and the City Administrative Officer told us that this year’s budget was balanced and that the Structural Deficit would be eliminated by 2029. Neither is true.
This year’s budget that began on July 1st fails to consider raises for the Fire Department that are estimated to be in the range of $25 million. Liability claims are budgeted for $87 million. This compares to over $250 million in the previous year and is expected to be considerably higher than budgeted amount. And it never fails that the interim Financial Status Reports detail over expenditures for the police and fire departments.
At the same time, the Reserve Fund is only $260 million, a decrease of almost $400 million a year ago caused by relying on overly optimistic revenue projections and over-expenditures associated with the new budget busting labor agreement. It is also $140 million below the minimum levels outlined in the City’s financial policies.
As a side note, just imagine if a real emergency occurs.
The City’s updated Four-Year General Fund Budget Outlook shows a surplus of $160 million for the fiscal year 2028-29. One minor detail: it does not include new labor agreements with the public sector unions. Adjusted for these new labor agreements with the police and civilian unions, the projected surplus turns into a shortfall of over $200 million.
Over the next four years, the average deficit is over $220 million for every year when adjusted for new labor agreements. And this assumes that revenues will increase an average of over 4% per year, an optimistic assumption, and that everything goes according to plan which is never the case.
How do the Mayor and the City Council intend to fix this fiscal mess? Nothing, just like they have in the past.
While there are some simple solutions such as legislation or a ballot measure prohibiting the City from entering into any new labor agreements that cause a deficit or a lowering of services. But this would not fly with the self-serving bo$$e$ of the public sector unions.
In the meantime, we can send a message to Mayor Bass and the City Council that “we’re mad as hell and we are not going to take this anymore” by rejecting in November all money related ballot measures, including the County’s $1.2 billion half cent sales tax increase to fund the inefficient homeless industrial complex and the State’s two bond measures totaling $20 billion for schools and infrastructure.
Maybe then the Mayor and the City Council will get their asses in gear.
(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: [email protected].)
