LA City Controller Warns of Budget Trouble During Next Fiscal Year

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LOS ANGELES (CNS) - Los Angeles Controller Ron Galperin warned today that the city will use up the remainder of the $1.28 billion it received from the federal American Rescue Plan Act this fiscal year, and some programs it funds will require a new funding source.

``Our economy continues to recover from the damage caused by the pandemic, but inflation is rising, and Los Angeles won't have extra federal funds to use in the next budget,'' Galperin said. ``This means the homelessness and equity programs created with those funds could be in trouble. It also means the city cannot take on any additional big expenses next fiscal year. The money just isn't there to do so.''

Galperin's report describes the city's financial position during the current fiscal year as ``solid,'' noting that general fund revenues are projected to be $7.55 billion, slightly higher than the budget amount and 7.1% higher than the last fiscal year. The increase will give the city's general fund a $42 billion budget surplus at the end of the year.

However, Los Angeles' expenses are expected to increase next fiscal year due to employee raises that were deferred during the pandemic. Meanwhile, the city won't have any ARPA funds.

Galperin urged Los Angeles to not add new, costly programs to the next budget, and said that programs that were created with ARPA funds should be evaluated based on their achieved results.

He also warned against using the city's Reserve Fund for non-emergency spending, saying money should be set aside to be used in a future crisis, as was during the pandemic.

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