State of California & Los Angeles Budget Deficits: How Can Either Pay For the LA Olympics?

Los Angeles Mayor Karen Bass traveled to Sacramento Tuesday to ask the California Legislature for $2 billion to cover the budget shortfall in Los Angeles. “What do you say to California taxpayers outside of LA?” Ashley Zavala with KCRA asked. “We are fortunate to have the Legislature and governor we do,” Bass replied. Translated, that means, “Fortunately we have a Democrat supermajority and Democrat Governor.”

Last week the Globe reported that Los Angeles City Administrative Officer Matt Szabo shocked the LA City Council by announcing that the city budget deficit was worse than they thought – $1 billion in the red.

Now the LA Mayor admits to a $2 billion dollar deficit and is asking for state funds to close the budget chasm.

The Newsom Administration budget is somewhere between $40 billion and at least $80 billion in deficit.

The City of Los Angeles is scheduled to host the Summer Olympics next, in 2028. It takes a decade to prepare for the influx of athletes and tourists, the Council on Foreign Relations recently explained.

Is Los Angeles really already 7 years into preparations, with 3 of those years under Gavin Newsom’s statewide covid lockdown?

Many are concerned whether the State and the City will be prepared for this venture, and if not, could be a disaster be waiting to happen?

“The costs of hosting the Olympics have skyrocketed, while the economic benefits are far from clear,” the Council on Foreign Relations recently reported. “A growing number of economists argue that the benefits of hosting the games are at best exaggerated and at worst nonexistent, leaving many host countries with large debts and maintenance liabilities.”

The 1984 Olympics in Los Angeles cost $287 million. Today’s Olympics cost billions. Japan hosted the 2020 Summer Olympic Games, costing $3.1 Billion – $3,100,000,000.

With a $2 billion deficit, and her hat in hand with the California Legislature for a bailout, how will LA Mayor Karen Bass and Gov. Gavin Newsom make the Olympics happen without bankrupting the city?

“These costs have led some cities to withdraw their bids for upcoming games,” the Council on Foreign Relations said.

“Once a city is chosen to host, it has around a decade to prepare for the influx of athletes and tourists. The Summer Games are far larger, attracting hundreds of thousands of foreign tourists to watch over ten thousand athletes compete in about three hundred events.”

LA28, the Los Angeles Olympic Games website is a little short on details. “The updated LA28 Games Plan reflects the bounty of existing world-class venues in LA, offering the best possible experience for athletes and fans, while supporting LA28’s commitment to fiscal responsibility and sustainability,” LA28 says. “When LA28 won the bid back in 2017, we shared a Games Plan that reflected the best venues for the sports anticipated in the LA28 Games. Since then, LA28 has introduced new sports, new disciplines are being considered, and new venues have been built.”

LA28 is very inclusive:

I wonder what the Trump Administration thinks about such a colossal potential disaster, and glittering example of Democrat Know-How. “The Democrats have shown everyone how they deal with fire prevention and response. Let’s not get dragged into this smoking hot mess,” a political friend said when discussing this with the Globe.

President Trump met with LA28 in February following the Pacific Palisades, Eaton and Los Angeles fires, “and received what he called an ‘unwavering commitment’ to continuing with plans for the Games,” the Los Angeles Times reported.

“We look forward to partnering with [Trump] and his administration to deliver a safe and successful Games our nation can be proud of,” said Casey Wasserman, chairman of the LA28 organizing committee. But it doesn’t appear that budget deficits were discussed.

The Globe made an inquiry with LA28 early Wednesday morning asking, “How is LA28 funded? How much of the funding has already been committed and spent in preparations for the infrastructure needed, 7 years into the 10 years of preparation?” We did not receive a response but will update the article if and when we do.

Regarding the Los Angeles budget deficit, it’s serious. As City Administrative Officer Matt Szabo laid bare for council members:

• A decline in overall revenues brought on by “downward economic trends” led to a revenue gap of $315 million.
• Increased spending on legal payouts brought in another loss of $100 million because of liability claims.
• Adding to this was $275 million that Szabo said was needed to replenish the city’s reserve fund as it had been depleted in recent months to balance the 2024-2025 budget,
• which was decimated by an estimated $282 million in wildfire expenses stemming from the Palisades fire in January.
• The city also stands to lose another $80 million in solid waste fee subsidies.
• On top of all that was an additional $250 million in scheduled pay raises for city employees.
• Szabo also said that the huge budget gap all but certainly means mass layoffs of city employees, likely in the thousands.

It appears obvious that Gavin Newsom does not care about what he leaves behind. He’s all about living in the here and now, and denying his past, as his vanity podcast confirms, as he tries to rewrite his own history and lengthy record of wreckage.

How will Gov. Newsom and Mayor Bass escape accountability this time? Will they wait until it is a five-alarm emergency, beg for a bail out and then blame any and all consequences on Trump? That seems to be standard operating procedure.

That won’t work this time – we want answers now. It’s not 2028 yet.