Los Angeles In “Financial Bind” & Faces “Tough Choices” Ahead, City Controller Says

deadline.com:

The City of Los Angeles currently is in a “strong financial position” but is facing a “financial bind” and will need to make “tough choices” in the next budget, according to City Controller Ron Galperin.“The pandemic hit the economy and our neighborhoods hard last year, putting the city in a financial bind,” he said upon the release of L.A.’s annual report for fiscal year 2021, which ended June 30. “Cost-cutting measures and federal funding helped Los Angeles get back on solid ground, but there are tough budget choices ahead.”See the full report here.In his report to Mayor Eric Garcetti, Galperin noted: “Although the City is currently in a strong financial position, significant challenges lie ahead.

The one-time revenue provided by the federal government will be gone by the end of fiscal 2022. When that time comes, the City will face difficult decisions on how to continue supporting the programs made possible by that funding, while also confronting new labor negotiations and rising inflation.”Galperin warned that “funding problems will arise in next year’s budget.

The current budget used $300 million from the federal government to create new programs to build equity and alleviate homelessness; it also used money from prior year appropriations, including $70 million from the Police Department.

This one-time funding will not be available for the next budget, leaving these programs at risk. In addition, most of the City’s workforce will receive raises this summer and new labor contracts will be negotiated, which could lead to additional employment costs.”Galperin recommends that the city “focus on collecting more revenue and limiting spending, while also finding ways to better use special funds to improve L.A.’s financial