City manager: ‘LA is going broke’ after spending half of reserves this year

(The Center Square) – Los Angeles City Manager Kenneth Mejia warned residents, “LA is going broke,” noting that the city spent half of its reserves last year. In April, the city faced a $476 million deficit, leading to significant cuts to Mayor Karen Bass’s Inside Safe program for homeless people in hotels. However, concerns about rising crime also led to an increase in the police budget, an increase in funding that Meija has strongly opposed.

“Just a year ago, the reserve fund was historically strong at $648 million,” Mejia said on via Budget). It’s getting close to falling below the 2.75 percent mark and if that happens, the city council will have to determine that there is financial distress.”

Last month, the city of Los Angeles agreed to pay $38 million in compensation to the federal government for failing to make enough of its federally funded “affordable” housing accessible to people with mobility, vision and hearing disabilities.

“The city needs honest budgeting: no inflated revenue projections, no underbudgeted liabilities, and wishful thinking that civilian departments (whose budgets have been cut) can operate on shoestring budgets while the LAPD can routinely overspend without spending controls,” Mejia continued on finances the city.

Mejia has particularly focused on increasing police spending to combat rising crime. He pinned a tweet about the LAPD’s helicopter spending to the top of his profile on X, noting that the program costs about $50 million a year.

The Republican Party, which has not had a Los Angeles mayor since Rick Riordan between 1993 and 2001, blamed the city’s financial situation and deteriorating quality of life on the Democratic Party, which has governed the city ever since.

“Despite all the high taxes we pay, Angelenos should live in a world-class city,” LAGOP spokeswoman Roxanne Hoge told The Center Square. “Instead, Mayor Karen Bass and her party have brought us decline at a very high price.”

The 2028 Olympics in Los Angeles will put the city’s governance on full display, with a promise for the notoriously car-dependent city to host a “car-free” Olympics contingent on the city’s ability to complete major new public transportation projects – including multiple rail connections Lines – before games start.

One such project is the 2.25-mile Automated People Mover, designed to transport people between the airport and the LA Metro. The project began in 2018 with a service launch date of 2023, which has now been pushed back to late 2025 or early 2026. The cost of the program could rise to as much as $3.3 billion if a new $400 construction delay agreement is approved, in addition to the existing $200 million set aside for lawsuits earlier this year.