Long Beach is projecting tens of millions of dollars in shortfalls in the years ahead because of the coronavirus — and that outlook is “potentially more likely to get worse than better,” according to the city’s budget manager Grace Yoon.
That’s the message she, along with City Manager Tom Modica, gave to the City Council during a Tuesday, May 19, presentation on Long Beach’s fiscal outlook.
Without any cuts, the city currently projects a $25-to-$41 million shortfall in the general fund for fiscal year 2020, a $30 milllion shortfall in fiscal year 2021, a $13 million shortfall in fiscal year 2022 and a $22 million shortfall in fiscal year 2023.
The 2020 fiscal year ends Sept. 30. The Long Beach City Council must adopt a balanced budget for 2021 by then.
Reasons for the red ink include increased spending on the pandemic response and a loss of sales tax, hotel tax, oil revenue and parking citation revenue, among other losses.
“The pandemic has substantially changed our financial landscape,” Modica said. “We do know that significant service reductions are going to be needed and that we really need to maintain our core services and values.”
Modica said that his team will prioritize maintaining full-time staff and look to part-time hours to make cuts. He said “everything should be on the table” as Long Beach assesses its options. But, he added, he will use a “balanced outcomes-based approach” to drawing up a new budget that will emphasize ensuring core services remain available throughout the city.
Along with police, fire and paramedic services, Modica said that would also include things like tree trimming, street repair, code enforcement, libraries and community programming, among other areas.
He said equity would play a significant role in determining which cuts to make.
To give “a sense of scale” for the types of cuts that will be necessary, though, Modica explained that cutting 10 police officers would save about $2 million; cutting a fire engine would save $3 million; eliminating tree trimming would save $3 million; removing a medium-sized library would save $500,000.
“By no means” was he suggesting those cuts, he said, but he wanted to describe how removing “$30 million out of this budget is going to be difficult.”
Although council members took note of the severity of the challenge that lies ahead, they said they were confident in the city’s leadership to ensure residents are impacted as little as possible.
“It’s going to be a few difficult years, that’s true,” Ninth District Councilman Rex Richardson said, “but this is a real opportunity for us to reinvest and reimagine and set the stage for a truly robust recovery in our economy.”