Why is California so expensive. Here is one example of how government creates inflation and forces people to flee, for their economic survival.
“At the March 19 meeting of the Los Angeles City Council, the City Administrator, Matt Szabo, delivered a startling presentation about the current state of the city’s finances. With the demeanor of someone who has just come away from witnessing a particularly gruesome crime scene, he informed the Council that Los Angeles is currently facing a nearly $1 billion budget shortfall. This amounts to roughly 13% of the city’s total budget.
This dire situation contrasts starkly with last year’s budget, approved in July 2024, which noted a few shortfalls, but by comparison was relatively benign, with spending over revenues for 2025-26 estimated at just $61 million. Suffice it to say, much has changed since.
Yup, an explosive sewer fee is going to be used to help cover the billion dollar deficit. Instead of cutting spending, they are going to raise fees—a tax with another name!
Decades of Delay Catch Up to L.A. as Sewer Fee Increases Aim to Plug $200 Million Gap
Angela McGregor, Westside Current, 4/3/25 https://www.westsidecurrent.com/news/decades-of-delay-catch-up-to-l-a-as-sewer-fee-increases-aim-to-plug/article_40543270-b224-4b71-93a8-0a6ee166a0ec.html
This article is the first in a series exploring Los Angeles’ deepening sewer and sanitation funding crisis. As City Hall considers sharp increases to solid waste and sewer fees, we examine how years of deferred maintenance, political hesitancy, and rising costs have created a multibillion-dollar gap.
LOS ANGELES – At the March 19 meeting of the Los Angeles City Council, the City Administrator, Matt Szabo, delivered a startling presentation about the current state of the city’s finances. With the demeanor of someone who has just come away from witnessing a particularly gruesome crime scene, he informed the Council that Los Angeles is currently facing a nearly $1 billion budget shortfall. This amounts to roughly 13% of the city’s total budget.
This dire situation contrasts starkly with last year’s budget, approved in July 2024, which noted a few shortfalls, but by comparison was relatively benign, with spending over revenues for 2025-26 estimated at just $61 million. Suffice it to say, much has changed since.
According to Szabo, both a shortfall in revenue and unforeseen expenditures are to blame for the current crisis. As of January (midway through the fiscal year), expenditures are a whopping $300 million higher, not including those incurred due to the Palisades fire.
To date, all forms of tax revenue have declined by $50 million – a figure that, with the massive loss of property tax revenue and possible upcoming recession, is expected to rise significantly. Szabo recommended a number of measures to mitigate the situation, none of which will be pain-free for residents or politically easy to approve for their representatives.
In this series, we’ll look into some of those measures, beginning with a proposal to increase the solid waste fee paid by homeowners and renters via their bi-monthly LADWP bill.
In May of last year, over the objections of landlords and business owners, the City Council voted to double sewer fees over the next four years. As Szabo’s office told the Current, “The Sewer Service Charge rate increase recently adopted is related to sewer construction and maintenance as mentioned above and is separate from solid waste collection.” By July 2028, the rate for single family homes will roughly double – from $75.40 every other month to $155.48. Part of the reason CD5 Councilmember Kay Yaroslavsky, who chairs the Energy and Environment Committee, urged the Council to approve the increase was because the rate had not been increased since 2020.
The situation with LA Department of Sanitation’s other fees—specifically, those pertaining to trash pickup, is even more dire. The solid resources fee, extra capacity fee and bulky item fees have not seen an increase since 2008, despite a host of new requirements, services and salary increases. The result of this, according to Szabo’s presentation, is that the City’s general fund will – without the requested increase in fees – wind up subsidizing Sanitation to the tune of $200 million in fiscal 2025-2026.
By 2029, single family homeowners and those living in duplexes, who are currently paying a $36.32 solid resource fee per month, will be paying $65.93. For those living in multi-family homes, the fee will increase from $24.93 to $65.93 per unit per month. Even with the new fees, the General Fund is on the hook for over $130 million each year to cover the shortfall.
So why was this massive imbalance between the cost of services and the fees collected to fund those services allowed to fester for so long? And why don’t the latest increases do more to limit what the city’s General Fund is covering? We asked Szabo’s office to explain and have not heard back.
It’s likely the simple answer is politics, and a clue to that can be found in the response to the fee increase that was approved in May. Landlords – who were already dealing with Covid-related moratoriums on rent increases – were now confronted with higher fees they weren’t allowed to pass along to their tenants. Daniel Yukelson, executive director of the Apartment Assn. of Greater Los Angeles, told The L.A. Times that “Such an increase on this massive scale will prove to be yet another straw that breaks the back of the city’s rental housing providers. There’s no end in sight for such a mismanaged city with its bloated salary and overall cost structure, wasted resources and insatiable appetite to seek new and higher taxes and impose significantly higher fees on ratepayers.”
In 2022, receipts from the Solid Waste Resources Revenue Fund – the part of the budget funded by these new fees — totaled $310,627,331 or about 2.6% of L.A’s total revenue. Sanitation’s budget during that period was $393,092,025 — a discrepancy of about $82 million, which was covered by the General Fund. At a time when pandemic impacts were still being felt and revenues were still relatively robust, there wasn’t any mention of hiking fees to close the gap.
As of March 24, this latest budget increase proposal has been passed along to the budget and finance committee for review.
