Report: LA City Deficit Soars To $87M

CAO reported $63.7m deficit in October

LOS ANGELES (CBS) — The city’s budget deficit for the 2010-11 fiscal year has jumped to $87.84 million, and it could get much worse unless an effort to privatize parking garages is not approved, according to a report released Monday.

City Administrative Officer Miguel Santana noted that the city’s various departments have submitted financial plans that would reduce the overall deficit to $23.65 million. But he noted that a recently identified police-uniform allowance added $9.5 million to the deficit picture, and if the parking- privatization issue isn’t addressed, the deficit will balloon by another $53.2 million.

Should that happen, it will require the city “to identify mitigating solutions beyond those identified in the operational plan including layoffs, additional furloughs, curtailed hiring or other reductions,” Santana wrote in his report.

Santana reported in October that the city’s deficit was $63.7 million.

“With recent actions by the retirement boards for sworn and civilian employee retirement systems, the four-year outlook has been revised,” Santana wrote. “As a result the city is facing increased deficits in the coming years, including a $349.8 million deficit in 2011-12, largely attributable to the assumption of lower investment returns for the sworn pension system.”

Santana noted that if city departments follow through with their deficit-reduction plans, the remaining budget gap could be covered using the city’s unappropriated funds. But he noted that the city needs to complete plans to privatize the operation of nine city-owned parking garages.

Santana said earlier that the contracts could generate millions for the city, with $53.2 million being earmarked to cover employee salaries and other expenses in the current fiscal year.

The rest of the money would be used to replenish the emergency reserve fund; pay off about debts related to the parking garages; and help reduce the estimated deficit projected for the next fiscal year.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

Comments

One Comment

  1. dave says:

    No suprise for LA.
    Politicians are playing smoke and mirrors hoping problem
    goes away.
    Start by sizing down your PENSIONS, Mr. Mayor and all
    employees.
    Do not come to us for taxes unless you dramatically lower
    your benefits, incuding pay.

  2. Joshua Darlington says:

    Thats an insane arguement. How are the two issues linked? Thats a small deficit compared to the pop of LA. Privitzing garages sounds like a theft of public assetts.

  3. Jon says:

    Parking at meters just got more expensive.

    1. Cal says:

      Those meters generate $40 million a year…all 35,000 of them.

  4. Senor Blues says:

    The recently published salaries of City employees reveals the reason behind this fiasco! The story of the Housing Chief living in luxury in Rancho Cucamonga with his if I remember correctly 300k salary and 4k housing allowance! Dept heads making 3-400k! Policemen and firemen all making over 100k! Clerical workers making 70k! Not to mention the pensions these people are due! They will make almost as much in retirement as they made when working!

  5. 2958 says:

    I know why not cut there pay by 60%….and stop getting car allowance…. They wont do that!!!!!

  6. pmoore says:

    There is simply no more money to rip off the taxpayers. Like Bernie Madoff all the dirty laundry is coming out. Taxpayers can now see all this mess the city is in.

  7. Astonished says:

    They need to “mitigate” this deficit from the top! Our Mayor and many of the top management people make more money than the people running the country! No wonder the City is in such debt!

  8. Notsurprised says:

    All of you are right! These over-paid thiefs make a lot of money by doing scratching their @ssets! Look at all of the city vehicles in downtown. They are just parked outside city hall & public works building when they should be working. They should fire all of them and rehire people who really want to work for a lower salary!

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