The 2020-21 budget was assembled under conditions unlike any this city has ever seen. The onset of the COVID-19 pandemic in March devastated the local economy, resulting in a drastic reassessment of the city’s financial prospects for the coming year. In a matter of weeks, revenue predictions declined by hundreds of millions of dollars. The city’s reserves, which the Budget & Finance Committee had prioritized and built up to record levels through hard work and sacrifice over the last eight years, were decimated in a few months.
In the two months since the Mayor first released his budget, our financial situation has gotten even worse. The Office of Finance has now projected that revenues could be from $45 million to $400 million below what the Mayor’s budget assumed.
The Mayor and the City Council have a mandate and a responsibility to ensure that the budget is balanced. We don’t have the ability to raise taxes or run up deficit spending like the federal government can. That means we need to be responsible enough to do the things that are necessary for the people and taxpayers of Los Angeles, even if they are unpleasant or unpopular.
As chair of the Budget and Finance Committee, my goal was to meet the city’s fiscal requirements in the midst of an economic meltdown while preserving the most vital city services, and giving us an opportunity to build for the future as the economy recovers. I am pleased that the Council approved all of our recommendations today, but our work is far from done. The Budget and Finance Committee will continually and aggressively review the budget and make frequent changes in spending throughout the fiscal year. This will be especially critical at a time when the outlook for the economy and the city’s revenues continues to be so volatile.
As has been true in cities across the country this year, much of the public dialogue surrounding this budget has involved police spending. The Council’s actions today will realize savings in LAPD’s budget, but in my view, these reductions should not be seen as a political reaction to criticism by some of the LAPD or of policing in general. These savings don’t reflect negatively on the importance of LAPD or the professionalism of its civilian and sworn personnel, any more than making necessary reductions in the budget of other city departments is a reflection of their value. For me, making thoughtful but significant reductions in the LAPD budget is about responsibly managing an unprecedented fiscal crisis and still meeting the critical and urgent needs of this city and its people, especially right now when so many are hurting so badly.
The simple truth is that the financial situation of the city right now is such that it could not reasonably be addressed without finding savings in the Police Department budget. Without the reductions approved by the Council in the LAPD’s budget, the cuts we’d have to make in all of our other core services, including those vital to our most vulnerable residents and to public safety, would be too extreme for the people to bear.
The committee’s recommendations approved by the Council will also allow us to begin to realize some important goals, including the following:
- We are beginning to rebuild the City’s reserves. As of today we have established a general fund reserve of over $200 million. While this is still far below the record levels we previously achieved, it will be critical in helping us survive the continuing budgetary challenges.
- The committee’s recommendations approved today also create a sensible approach to avoiding furloughs. We have set aside $40 million to ensure that furloughs for city employees can be eliminated at least for the first quarter of the year. If furloughs can be avoided altogether because the new separation incentive program generates sufficient savings, this funding can be used to adjust in midyear for declines in revenues or restoration of critical services.
- We created critical positions in the Fire Department, Planning Department, Public Works, and Streets LA, including the Urban Forestry Division. At the same time, we created a new system to ensure that Council retains the ability to monitor and restrict hiring so that expenses can be controlled.
- Thanks to the leadership of committee Vice-Chair Curren Price, the Council set aside $100 million to begin to make progress toward our goals of making critical reinvestments in city services, reinvesting in disadvantaged communities and communities of color, reimagining public safety, and financing the City’s incredibly successful targeted local hire program. This includes $10 million invested in the young people of our city through the Summer Youth Jobs program.
- While the Council maintained a broad civilian hiring freeze to constrain spending, we exempted the Targeted Local Hire program from that hiring freeze. As a result, city departments will be able to use this incredibly successful program to fill certain entry-level positions while also providing a pathway through which underserved communities can achieve good civil service jobs and build public service careers with the city.
In the coming year, as we emerge from the health impacts of COVID-19, we must remain resolute in responding to the economic impacts as well. City Hall must focus on lifting people up, reinvigorating our small businesses, and getting Los Angeles back to work. As we succeed in doing so, our revenues will recover. In the meantime, we need to be responsible and disciplined in our budgeting to ensure the delivery of essential services, the elimination of structural deficits, the restoration of our reserves, and a sustainable future for the city’s finances.