Los Angeles’ revenues are continuing to grow, but government spending could soon catch up, according to City Controller Ron Galperin’s annual “Revenue Forecast Report” released Friday.
“Our local economy is still healthy and growing, and the good news is that it should continue through at least the next fiscal year,” Galperin said. “But we need to be cautious and careful. Expenses are catching up and we’re too often balancing the budget by tapping into the city’s reserves. Along with continued prudent budgeting, L.A. needs to make every effort to hone in on new sources of revenue.”
The report provides updated estimates of the current year’s general fund and special fund revenues, and also projects how much revenue the city will bring in next fiscal year.
According to the report:
— general fund revenue this fiscal year will end up 5.5 to 6.7 percent higher than last year;
— the general fund should continue to expand in 2019-20, but revenue growth likely will slow to less than 3 percent, while expenditures are estimated to increase by 4.4 percent;
— the city is projected to generate $40 million from cannabis-related licensing fees and business taxes, which could grow if the city intensifies its efforts to permit new cannabis businesses and enforce against illegal ones;
— city leaders are drawing on reserves to balance the budget more often than not, even in good years, and the practice leaves less money available when the city really needs it;
— special fund revenue continues to grow faster than general fund revenue, and the city should find more ways to use special funds on neighborhood needs in next year’s budget; and
— due to Galperin’s 2014 audit and partnership with the City Council to update the Street Damage Restoration Fee, the city is projected to receive $40.2 million in revenue this year and $70.5 million next year, which is 10 times the revenue the city recovered for the fee in 2018.
The Revenue Forecast Report can be found at lacontroller.org/revenue.
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