The two seasons of L.A.’s budget process
There’s the splashy public show — and the private cajoling, debate and decisions.
There is a public season for the Los Angeles city budget and a private season.
The annual State of the City address often doubles as a splashy launching pad for the public season, with the mayor previewing priorities and new programs a few days before releasing a proposed budget.
Per the City Charter, L.A. mayors have until April 20 to deliver the budget to the City Council.
You’re probably familiar with the roughly six-week sprint that follows: a series of public hearings in the council’s budget and finance committee, presentations from all the players and finagling over committee recommendations, then a vote in the full council.
This is the sexy part, or at least as sexy as anything involving several hundred pages of fiscal policy can be. But it’s not where the actual action happens.
Deputy Controller Rick Cole, a political veteran who oversaw the budget process for two years under former Mayor Eric Garcetti, explained it with an apt metaphor: The public proceedings are “the visible part of the iceberg, but the decisions got made below the waterline.”
The real cajoling, debate and decisions about how the nation’s second-largest city spends its money are made during budget development, or what we’ll call private budget season. And that has been underway for months, since before Mayor Karen Bass took office.
A refresher: L.A.’s fiscal year runs from July 1 to June 30. The mayor is responsible for formulating the budget — one of her more formidable powers — and does so with the aid of the city administrative officer.
The task is fully in the mayor’s hands until April 20, when she hands the budget over to City Council, which has until June 1 to accept, reject or alter it. Some backand-forth between the entities can follow, depending on whether changes made by the council are accepted. (For a more detailed description, see Page 138 of Raphael Sonenshein’s excellent “Structure of a City Government.”)
Los Angeles mayors have historically begun their terms in July, giving them nearly a year in office before being responsible for delivering a budget. But thanks to a change in the election cycle, Bass was plunged into below-the-waterline budget season as soon as she took office.
That’s a steep learning curve for a first-time mayor. It was widely speculated that the budget deadline helped push Bass’ decision last November to extend job offers to all Garcetti employees through April 22.
City departments submitted proposals for next year’s budget in midNovember, nearly a month before Bass assumed her role. Her office is knee-deep in meetings with those departments, which are being led by Director of Policy and Budget Initiatives Joey Freeman, along with Bernyce Hollins, who started in the mayor’s office last week.
A memo Bass sent Feb. 15 to general managers of most city departments laid out some of her administration’s thinking.
The mayor appeared intent on tamping down expectations, saying “collective requests from departments, combined with our city’s obligations, far exceed the resources projected to be available.” Bass also said her administration will probably deny funding requests for new positions unless they’re critical, with the priority on filling the high level of vacancies.
Her memo repeated her focus on homelessness — one of the bigger question marks for next year’s budget, since it’s not clear how much her efforts will cost.
In a revenue forecast report released last week, City Controller Kenneth Mejia noted that Bass’ “effort to fund temporary housing and spur construction of additional permanent housing is unknown, but will undoubtedly require major funding.”
The report suggested difficulties, with general fund revenue projected to grow at a rate below that of inflation and the increase in city costs, among other potential issues.
Councilmember Bob Blumenfield, who chairs the city’s budget and finance committee, said Los Angeles isn’t seeing as much growth as officials would hope, nor do they have a flood of federal funds as in recent years. But it’s also not a crisis in which the city is on the verge of layoffs, he said.
“This is not a year of radical change in the sense of our budget,” Blumenfield said. “Unlike 2020, where the economy fell through the floor, and unlike some years where you’re seeing a windfall, neither of those cases is the case here.”
The budget won’t be formally handed over to Blumenfield until late April, but he and his team have begun having informal conversations about it with the administration.
The budget will be largely baked during the next month and a half, as departments lobby the mayor on myriad fronts and her office and the city administrative officer hit back with the hard questions.