LA WATCHDOG--Despite the infusion of $1.35 billion from the Federal government, the City of Los Angeles still has a Structural Deficit that it is unwilling to attack.
According the Four Year Budget Outlook, the City is projecting a budget surplus of $309 million for the 2025-26 fiscal year. But when this projection is adjusted for increases from new labor agreements with the police, firefighters, and civilian employees (an estimated $220 million) and lower revenues based on more realistic growth rates (an estimated $400 million), the surplus turns into a $300 million deficit.
The erosion of the City’s finances is already underway. For the upcoming year, the City is using $134 million of one-time revenues to finance on-going operations. This is contrary to the City’s Financial Polices because these services will need to be funded in the following fiscal year (2022-23) from existing on-going revenues.