Analyst: City of L.A. Faces Budget Deficits Through 2018

Los Angeles faces budget deficits through 2018 even if elected officials keep a lid on spending and secure new concessions from the workforce, the top financial analyst at City Hall warned in remarks published today.

In a memo to the City Council, City Administrative Officer Miguel Santana said lawmakers won't have the money to rebuild services cut during the recession until the 2018-19 fiscal year, unless new tax revenue is found or other programs are cut, the Los Angeles Times reported. That year, the city is expected to experience a $20.9-million surplus, he said.

The situation could limit Mayor Eric Garcetti's ability to expand core services during his four-year term. Garcetti has promised to take a "back to basics" approach to city government, proposing a budget with modest hikes.

Deputy Mayor Rick Cole said Garcetti is working on ways to generate savings for the city that offset Santana's projections in future years, The Times reported. The mayor is focusing on limiting workers' compensation costs, improving the city's purchasing process and increasing productivity through technology, he said.

Santana released his budget memo three days after Garcetti proposed his first spending plan, which is designed to eliminate a $242 million shortfall for the fiscal year that begins July 1. The council must decide whether to approve or rework Garcetti's 2014-2015 financial plan next month.

Even after a budget is passed erasing next year's revenue shortfall, more deficits will follow due to rising employee costs, Santana's memo said, The Times reported.

Santana projected a $165.2 million deficit in 2015-16; a $186.8-million deficit in 2016-17; and a $73.9-million deficit in 2017-18, according to the newspaper. Each of those figures assumes that the council will approve Garcetti's gradual reduction in the top business tax rate over the next four years.

--City News Service