Dear Friend:

As Chair of the Budget, Finance, and Innovation Committee (BFI), I take the health of our city’s finances very seriously and there is no sugar coating the reality we face for the next year - services will be reduced because we will be operating under a ‘bare bones’ budget. While the Mayor’s proposed budget for fiscal year 2024-25 is technically balanced, the financial foundation on which it rests is frighteningly thin.

I want to tell you a little about why we are in this situation, and what I’m doing to make sure that within this reality we are doing everything possible to deliver essential services, address critical needs, and shore up our City’s financial foundation. 

We are in this situation because revenues have been relatively flat while the costs to operate the City have been skyrocketing. The basic finance problem has been accentuated because federal COVID dollars have stopped flowing and critical State funding sources have been reduced. The biggest cost driver of City expenses is our labor costs and given the inflation we all experienced in recent years, the wages we were paying our employees were not keeping up with the true increased cost of living. And, given that most of our employee contracts were up for renewal and negotiation this year, it was inevitable that those wages would have to go up.

Several months ago we made the choice to fund long term contracts with the Police and other labor partners. That choice will provide labor stability through the Olympics and will insure that people who work for the City can actually live in the City, but the decision had budget consequences which are currently playing out in the putting together of this year’s budget. 
Despite this situation, I have been trying to tweak the Mayor’s budget proposal to ensure that the City’s departments are not decimated and that rational position changes can be made – flexibility is essential. I’m trying to transform the funding crises into an opportunity to do things differently, more efficiently and more transparently. While this Budget avoids layoffs, it does also drastically reduce the number of authorized City positions. And, while I and most of my committee colleagues seem ready to provide the Mayor the entire “Inside Safe” homelessness budget she has requested, we have altered the manner by which the funds can be spent to insure better accountability and transparency. This is one of the biggest and most controversial items in the budget.

Adding to the budget balancing challenges are a number of ongoing and new legal requirements which range from lawsuit settlements related to homelessness and disability issues to voter mandates such as those called for in the recently passed Safer Streets Initiative (HLA). We have held a series of marathon hearings where we daylighted all of these challenges, where we vetted the Mayor’s proposed budget line by line, and where we discussed priorities, policy solutions and funding changes. These hearings involved bringing forward every City General Manager, the Chief Administrative Officer and others to discuss the problems and potential solutions.

We have taken a break from these hearings and have asked the City’s Chief Legislative Analyst (CLA) to compile our requests and priorities and put together a budget document colloquially known as “the rack up.” This document is the blueprint for translating the priorities, policies and suggested funding additions and deletions into a working budget document which can ultimately be voted on.
The next committee meeting is set for May 16th, when committee members will hear from the CLA and vote on a recommended budget for full Council review. On May 22nd, members of the public will have another opportunity to provide public comment on the recommended budget and on May 23rd, Council should vote on the actual budget document that will be sent to the Mayor for approval. You may also provide written testimony to CF #24-0600 here.

The meeting agenda and calendar can be found here and all hearings will be broadcast live on Channel 35. If you have any questions or concerns, always feel free to reach out to my team and I at c03foryou@lacity.org.

Councilmember Bob Blumenfield

200 N Spring Street, Room 465, Los Angeles, CA 90012

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