San Fran has a massive budget deficit—and must spend more on the homeless and illegal aliens. Los Angeles now has a massive deficit, while spending money, with no results, on the homeless and illegal aliens. At the same time the schools are failures and crime is going up while businesses and productive people are leaving.
“The Second Financial Status Report dated November 30thshowed that this year’s budget for the first four months is $390 million below plan because of over-expenditures of $297 million and a revenue shortfall of $93 million.
Police Department overspending was $136 million due to the impact of the new budget busting labor agreement, projected hiring, and increased overtime. Other areas of overspending included the Fire Department ($37 million), General Services ($38 million), and Liability Claims ($47 million).
Revenues were off by 6.2% ($93 million) versus plan, the major culprits being the documentary transfer and transient occupancy taxes.
Spending up while revenues down—recipe for economic collapse. Oh, the Hollywood strike is over-but between 17-20% have lost their jobs—more revenue loss. Those that lost their jobs in Hollywood will go to George, Tennessee and Texas which is booming in the movie and TV filming business. Can’t wait for the Marxist response to this disaster.
LA Underwater with $390M Budget Shortfall Amid Labor Agreement Fallout
JACK HUMPHREVILLE , city Watch, 12/7/23 https://www.citywatchla.com/la-watchdog/28100-la-underwater-with-390m-budget-shortfall-amid-labor-agreement-fallout
LA WATCHDOG – The Second Financial Status Report dated November 30thshowed that this year’s budget for the first four months is $390 million below plan because of over-expenditures of $297 million and a revenue shortfall of $93 million.
Police Department overspending was $136 million due to the impact of the new budget busting labor agreement, projected hiring, and increased overtime. Other areas of overspending included the Fire Department ($37 million), General Services ($38 million), and Liability Claims ($47 million).
Revenues were off by 6.2% ($93 million) versus plan, the major culprits being the documentary transfer and transient occupancy taxes.
To eliminate the shortfall, the City is considering the reappropriation of previous unused payroll funds ($73 million), the savings from continuing employee vacancies, and the raiding of the Reserve Fund.
The balance of the fiscal year is troubling. There is the continuing impact of the budget busting labor agreements with both the police and civilian unions. Other problem areas include increased Liability Claims, continuing overruns on the Human Resources and Payroll project, the cost of migrants bussed in from Texas, and the continuing fallout from the 2021 fireworks explosion on East 27th Street.
There is the likelihood that future revenues will not meet expectations. If the 7% shortfall in the seven economically sensitive taxes (property, business, sales, utility, hotel, documentary, and parking occupancy) were to continue, there is the possibility that annual revenue may be $300 million (or more) below plan. And this assumes no softening of the economy.
Overall, the once balanced budget for this year that was thrown into a deficit of $170 million because of the budget busting labor agreements may now well exceed $250-300 million.
Next year (2024-25), the deficit is projected to be more than $400 million because of the budget busting labor agreements with the police, fire, and civilian unions. There is also the question of how to fund the billion-dollar homeless budget now that the HHH bond funds have been fully allocated.
Mayor Karen Bass, City Council President Paul Krekorian, and Budget Chair Bob Blumenfield approved these budget busting labor contracts knowing full well that these contracts would create a hole in the budget of more than $600 million for this year and next year. While the leaders of the public sector unions are pleased with these contracts that were negotiated behind closed doors, we Angelenos are left holding the bag, whether it be through reduced services, lunar crater streets and broken sidewalks, and increased homelessness.
This leaves us with two immediate questions: How will the City finance the budget shortfalls for this year and next? And how do our elected politicians expect us to trust them, especially when they ask us to approve upcoming ballot measures to authorize new bonds and increase our already burdensome taxes?
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee, the Budget and DWP representative for the Greater Wilshire Neighborhood Council, and a Neighborhood Council Budget Advocate.
