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Homelessness, COVID-19, and Rising Cost of Employees Hurt L.A. Finances

Analysis bonds budget city controller City Council finances homelessness Los Angeles County NY-Cal Opinion Southern California US

Homelessness, COVID-19, and Rising Cost of Employees Hurt L.A. Finances

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Commentary Los Angeles city controller Ron Galperin has released his office’s annual Comprehensive Annual Financial Report for fiscal year 2020 and provided an update on how things in the current fiscal year. As expected, it’s bad. During fiscal year 2020, the general fund shrank 9.8 percent from $1.1 billion in July 2019 to just $992 million in June 2020. Unfortunately, while revenue growth reversed dramatically during the 2020 fiscal year, expenses kept climbing. Worker benefits and salary costs were up 7.4 percent versus the previous fiscal year, and pension fund contributions were up 7.5 percent year-over-year. While many city residents were out-of-work and depending on rent moratoriums, loan extensions and government benefits, city workers were apparently getting raises as the costs of their benefits continued to rise. The total number of full-time equivalent employees increased by just 2.5 percent, suggesting about a five percent increase in salaries and employee benefit …

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