On Sunday, Los Angeles Mayor Eric Garcetti announced during the annual State of the City address that due to a budget shortfall caused by the effects of the coronavirus, a sweeping 26 unpaid days off of furloughs for all civilian employees would be put into effect.
A nearly $600 million projected shortfall
Los Angeles is expected to have a $231 million shortfall this year and as much as a $598 million shortfall for the next fiscal year due to so many businesses being closed or underperforming due to the coronavirus. Mayor Garcetti specifically highlighted the tourism industry being affected, which has had a ripple effect across many businesses, especially hotels.
“This is bigger and it will hurt more. Our city revenues have plummeted. Hotel reservations have collapsed,” noted Garcetti during the address. “From a fiscal perspective, this is the worst it’s ever been.”
The projected furloughs would, in total, effectively mean a pay cut of around 10% for the thousands of workers affected. While no staff reductions were announced during the speech, Garcetti confirmed the hiring freeze started in March due to the pandemic would continue into the foreseeable future. He also announced many department cuts that would be specified when he turns in his budget proposal, but also said that they would not be reduced so much as to get rid of essential services for people.
“I have drawn a red line around the foundation of our common good. Those back-to-basic investments that keep our neighborhood safe, our streets clean, our families’ housed, and our children, and seniors fed,” added Garcetti.
A somber State of the City address
The coronavirus brought a significant change in tone and topics compared to previous State of the City speeches. While past addresses by Garcetti and previous mayors were more fortuitous and shone a spotlight on most Los Angeles departments and projects, the 202o address focused mainly on the coronavirus. And while previous State of the City addresses were given in a more joyous mood in a filled room, there were few audience members at Los Angeles City Hall watching Garcetti give his speech in a serious tone.
“I’ve never before hesitated to assure you that our city is strong. But I won’t say those words tonight,” said Garcetti during the address. “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.”
While Garcetti did note many grim statistics, such as the 600 who have died in LA County to coronavirus so far, he did give good news here and there, including the success of the stay-at-home order to flatten the curve quickly in LA and not meet the fate of cities such as New York.
Garcetti also gave a plea for assistance from the federal government during the speech. While he did ask for additional funds, he also called for nationwide eviction moratoriums, more Section 8 vouchers, cost-free college, giving immigrants regardless of legal status recovery help, and a national job growth bill.
“I’ve called on the federal government to either loosen restrictions on emergency funds that prevent us from using them to replace lost revenue or in the next CARES [Coronavirus Aid, Relief, and Economic Security Act] package help bail out America’s cities, just as you bailed out the banks,” explained the Mayor.
Experience in economic crisis cuts
The unusual nature of the State of the City address, while based on the current coronavirus crisis, was noted by some to have also come from previous experience in dealing with fiscal shortfalls.
“His speech brought to mind similar speeches by mayors in 2009 and 2002 during previous recessions,” said political analyst Jack Warren. “Garcetti was actually the City Council president during the recession, and he had to oversee all the cuts and reductions. It took years to recover from that.”
“He even noted how long LAX took to recover after only less than 3 days of being shutdown after September 11th. He’s been through tough economic times before and he knows how to react to them now. A lot of people are mad at him, and other leaders, for closing down the city and helping cause this economic crunch. But he didn’t want to face more deaths and overburdening the city with cases. It was really damned if you do, damned if you don’t.”
“These cuts and reductions are going to hurt people in LA, but the city has survived worse. And let’s hope we can start to reopen the city soon.”
Mayor Garcetti’s 2020-2021 city budget proposal for the fiscal year starting July 1st is expected to be delivered sometime Monday.