LA faces projected $288.6 million deficit amidst fiscal concerns
A City Council committee is set Wednesday to hear a report about LA's mid-fiscal-year financial status, as well as potential options to address a projected $288.6 million deficit.
Driving over-expenditures are the Police Department ($105.3 million), liability claims ($91.6 million) and the Fire Department ($51.5 million), accounting for 86% of overspending, the report noted.
City Administrative Officer Matthew Szabo will lead the discussion and highlight information from the Third (Mid-Year) Financial Status Report. In one strategy to balance the budget and possibly prevent impacts in the next fiscal year, the city implemented a Prioritized Critical Hiring Process -- a plan to potentially eliminate thousands of "non-critical" city positions that are currently vacant.
Officials say this could save the city between $150 million and $200 million. There is a chance this plan could include priority positions for non-sworn public safety positions to be cut.
The Financial Status Report states these fiscal challenges will require the use of Reserve Fund money to rebalance the fiscal 2023-24 budget -- likely to cause the fund to drop below the 5%.
The Reserve Fund is the account used to defend the city against unbudgeted or unforeseen events that may negatively impact the city's fiscal solvency.
