LOS ANGELES (AP) — A new report says Los Angeles is facing a $350 million deficit and a sluggish economy in the next fiscal year but the unemployment rate will drop slightly.

City Controller Wendy Greuel says the city will receive about $6.3 billion in revenues in the 2011-2012 year that starts in July. That’s down $130 million from the current year and will leave LA with the smallest general fund since 2006.

READ MORE: San Bernardino Surpasses 3K Total COVID-19 Deaths, Ventura Nears 900

Greuel’s economic forecast Wednesday warns that the city can’t count on increasing tax revenues to help balance the budget. There will be more money from sales and other taxes but a $24 million decrease in property tax revenues will offset that.

READ MORE: New COVID Vaccine Site Opening At USC Campus, City Working To Get Doses To Homebound Residents

On the plus side, the forecast says the local jobless rate will drop from 12.4 percent to 11.7 percent.

MORE NEWS: Poll: LA County Crime Victims Feel Criminal Justice System Failed Them

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)