LA Mayor Garcetti releases city budget with steep service cuts, furloughs

Mayor Eric Garcetti is expected to release his proposed budget for the 2020-21 fiscal year Monday after warning Los Angeles will reduce some services and furlough many municipal employees for about a month.
LOS ANGELES (KABC) -- Mayor Eric Garcetti has released his proposed budget for 2020-21, recommending substantial service cuts and employee furloughs to deal with the fiscal turmoil created by the coronavirus pandemic.

"I've never before hesitated to assure you that our city is strong, but I won't say those words tonight,'' Garcetti said in his State of the City address Sunday night. "Our city is under attack. Our daily life is unrecognizable. We are bowed and we are worn down. We are grieving our dead, but we are not broken nor will we ever be.''

The new budget includes a hiring freeze that is in place now and will be extended into the next fiscal year, which begins July 1. Civilian employees are being asked to take 26 furlough days without pay over the next fiscal year, the equivalent of a 10% reduction in pay.

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Los Angeles has already borrowed $70 million from the city's Special Funds and Reserve Fund to front the costs related to our COVID-19 response. Garcetti said some of that money will be reimbursed by the state and federal governments.

The city expects to face a loss of $230 million in tax revenue.

"From a fiscal perspective, this is the worst it's ever been,'' Garcetti said, saying the coronavirus impacts dwarf those seen after the Sept. 11, 2001 terror attacks and 2008 recession.

Unions representing city employees are unhappy about the furlough plan.

"We cannot call these men and women heroes and then turn around and attempt to balance the budget on their backs," said Bob Schoonover with SEIU Local 721.

City revenues have plummeted and hotel reservations have collapsed, according to Garcetti. One of the biggest declines in revenue the city has experienced is through its airports, which have seen a 95% reduction in air traffic, as well as tourism and entertainment industries, which have been temporarily shuttered. The Port of Los Angeles has also been operating at about 75% to 85% compared to last year since the pandemic affected global trade.

The mayor noted that the city has built up formidable reserve funds in recent years, but even with those rainy day funds, the revenue shortfalls caused by widespread business shutdowns, a virtual halt to tourism and spiking unemployment will have repercussions at City Hall. Garcetti said his 2020-21 budget proposal will be "a document of our pain.''

"Soon, many departments will have to operate at sharply reduced strength,'' he said. "Cherished programs will lose funding, while recreational and community services will see significant changes. We'll have less to spend on removing graffiti and caring for our urban forest.''

He stressed that budget cutting will largely spare critical services, such as police and fire protection and other services that "keep our neighborhoods safe, our streets clean, our families housed and our children and seniors fed.''

The mayor said the test for Angelenos and the nation will be how they come back to daily life once the pandemic subsides, and he referred to quotes from former President Franklin D. Roosevelt as the U.S. clawed its way out of the Great Depression.

"That spirit we have felt each night at home and across our neighborhoods and across this city, that is the spirit that must move our economic recovery and our commitment to heal an unjust world,'' Garcetti said.

Garcetti's budget proposal is available on the mayor's website.

City News Service contributed to this report.
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