Los Angeles is grappling with a significant financial crisis, as outlined by City Controller Kenneth Mejia on March 3. He informed Mayor Karen Bass and the City Council that the city’s revenue for the current fiscal year is projected to fall short by $140 million against the adopted budget.
The primary sources of this revenue shortfall include business taxes, sales taxes, as well as income from grants, licenses, permit fees, and fines.
Looking ahead to the fiscal year commencing July 1, Mejia cautioned that revenues are expected to decline slightly, which presents a daunting challenge for city leaders as they attempt to craft a balanced budget for fiscal year 2025-26.
In his communication, Mejia emphasized the necessity for any sustainable and equitable budget plan to garner broad support from the community, labor, businesses, and other stakeholders.
This indicates that any initiatives to cut programs, lay off unionized workers, or raise taxes might face significant backlash from those who are crucial to maintaining the current political landscape.
The immediate solution appears to be seeking financial assistance from state or federal authorities. On March 24, Mayor Karen Bass, accompanied by a delegation of City Council members, traveled to Sacramento with hopes of securing a $2 billion bailout.
However, the state’s own budget issues dampened enthusiasm from the Legislature, leaving Bass to return on April 23 to once again plead for help to bridge the city’s nearly $1 billion deficit.
Regrettably, the rest of the state showed little willingness to address Los Angeles’ financial troubles, exacerbated by what Mejia described as previous overspending. City leaders had agreed to budget-busting labor contracts that are predicted to plunge Los Angeles into deeper financial turmoil for the foreseeable future.
With state assistance dwindling, the federal government emerged as the next potential source of relief. Nonetheless, the political climate for receiving bailouts has soured, particularly following the cessation of COVID pandemic funds and the departure of the Biden administration.
Tensions spiked on June 6 when the Trump administration intensified federal law enforcement activities in Los Angeles. In response, Mayor Bass released a statement asserting, “We will not stand for this.”
City Controller Kenneth Mejia echoed her sentiments, accusing the federal authorities of creating chaos in Los Angeles through coordinated ICE raids, which he described as a “siege” on the city.
Mejia criticized the LAPD for its involvement in these operations and pledged to evaluate the impact of federal actions on city resources and taxpayer dollars.
By mid-June, the financial implications of these events were becoming clearer, with the city’s cost for managing protests and related incidents estimated at $19.7 million, which included $11.7 million for police overtime.
Additionally, damage to city properties was estimated at $780,601, not to mention the potential liabilities arising from federal lawsuits filed by reporters alleging rights violations by the LAPD.
On June 14, a coalition of federal and state lawmakers representing the Los Angeles area convened with Mayor Bass to demand the termination of federal law enforcement raids.
Congresswoman Norma Torres voiced her calls for accountability and reimbursement for the costs incurred by local agencies due to federal actions, noting that they should be financially responsible for the chaos they instigated.
Despite the grim outlook for federal funds, the City Council is contemplating a lawsuit against the federal government regarding what they consider the unconstitutional arrests of city residents, hoping to find financial relief through legal channels.
Amid these mounting challenges, Mayor Bass has taken steps to engage with the community, urging residents to volunteer for a cleanup effort in downtown Los Angeles ahead of major upcoming events such as the World Cup and the Olympics.
However, critics suggest that her resignation might be the most effective initial step in the cleanup and recovery process for the city.
image source from：sbsun
