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LA WATCHDOG - The City Charter states that “on or before March 1 of each year the Controller shall submit to the Mayor, with a duplicate to the Council and to the City Administrative Officer, a detailed statement of the money that the Controller estimates will be required for the interest and sinking funds and for all outstanding bonded indebtedness and other lawful obligations of the City or of special districts and an estimate of the revenue to be derived from fines, licenses and other sources.”
This will be the first public information about next year’s budget (2026-27) since the City departments submitted their budget requests to the Mayor before Thanksgiving. These submissions, however, were not very useful for mere mortals since this data dump comprised over 16,700 pages. Of interest was that the proposed appropriations were $700 million or 13% more than this year’s Adopted Budget, contrary to Mayor’s request for restraint because of the projected budget deficit.
The growth in City revenues will not accommodate these budget requests. According to the latest Four-Year General Fund Budget Outlook, revenues are projected to increase by $225 million to $8.4 billion, or 2.7%, over the Adopted Budget. At this level, the budget shortfall is expected to be in the range of $90 million. When adjusted for unexpected increases in Police Department compensation levels associated with additional police recruits, the shortfall increases to around $150 million.
On the positive side, revenues through October were almost $120 million above plan with six of the seven economically sensitive taxes above plan. Only the transient occupancy hotel tax lagged, not unexpected because of the decline in international tourists.
In the past, the Controller’s estimates were closer to actual results than those in the Mayor’s Proposed Budget and the Adopted Budget. This led the City to accept the Controller’s Revenue Forecast last year.
We can also expect the Controller to comment on the City’s budget and finances as he has in the past. This will provide us with a look into the dynamics of the Mayor’s Proposed Budget that will be submitted to the City Council on April 20.
There are many issues that will need to be addressed, including how to balance the budget, the funding for the City’s homeless strategy, plans to address the City’s lunar cratered streets, cracked sidewalks, poorly maintained parks, and nonfunctioning streetlights, and which departments will have their budgets dinged.
Stay tuned. And have your hip boots ready.
(Jack Humphreville writes the LA Watchdog column for CityWatch, where he covers city finances, utilities, and accountability at City Hall. He is President of the DWP Advocacy Committee, serves as the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and is a longtime Neighborhood Council Budget Advocate. With a sharp focus on fiscal responsibility and transparency, Jack brings an informed and independent voice to Los Angeles civic affairs. He can be reached at [email protected].)
