LA WATCHDOG - In analyzing Mayor Bass’ budget (2023-24) that will be submitted to the City Council on Tuesday, April 18, there are several key areas that we need to review and analyze.
The primary focus needs to be on the mayor’s budget for homelessness, her number one priority. This includes the allocation of an estimated $672 million derived from Measure ULA, the recently approved tax on property sales of $5 million or more. After administrative expenses, 70% is allocated for Affordable Housing Programs and 30% for Homeless Prevention Programs.
In the current General Fund budget, an estimated $250 million was allocated for homelessness. Will the money from the Measure ULA tax be in addition to these funds or replace this allocation?
Another area of focus is the Reserve Fund. Will the City use the Reserve Fund to balance the budget? If so, this is a sign of fiscal irresponsibility as the Reserve Fund should be for emergencies such as earthquakes, pandemics, or recessions, not for balancing the budget.
Based on the Controller’s Revenue Forecast Report, the modest increase in General Fund revenues will not be sufficient to cover increased expenses, especially if the City attempts to fill numerous vacancies (including the understaffed Police Department), enters into new labor agreements, properly funds the repair of our infrastructure (streets, sidewalks, parks, etc.), and launches new initiatives. This may require the use of the Reserve Fund to balance the budget.
Another question is whether revenues from Measure ULA will be used to reimburse the Reserve Fund for $75 million of homeless related advances (Projects Home Key and Room Key).
As of March 1, the Reserve Fund and the Budget Stabilization Fund represented 8.5% of General Fund revenue, a healthy reserve but below the goal of 10%.
Finally, we need to review the Four-Year Budget Outlook. According to the latest iteration in June, the City Administrative Officer was projecting a four-year cumulative surplus of over $1.1 billion, indicating the City does not have a Structural Deficit. Will the City be able to maintain this surplus and live within its means over the next four years?
Mayor Bass’ State of the City will be laying out where we go from here – A New LA. We hope so.
(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. He can be reached at: [email protected].)