The City Budget
1. What is the size of the City's operating budget?
2. When is the City's fiscal year?
3. Where do the City's revenues come from?
4. What does the City spend its money on?
5. What is the budget process?
6. What are some of the challenges facing the development of the City budget?
7. How can I contribute input in the development of the City budget?
What is the size of the City’s operating budget?
For the current fiscal year (2007-08), the City’s operating budget is $6.82 billion.
When is the City’s fiscal year?
The City’s fiscal year (FY) begins on July 1 and ends on June 30.
Where do the City’s revenues come from?
The City collects revenue from over 20 different sources. More than half (55%) of the City's total revenue comes from General Fund sources that are considered unrestricted including local property taxes, sales taxes, business taxes, and utility user taxes.
The remaining portion (45%) of total revenue comes from special fund revenues that must be spent for specific purposes such as special taxes on gas and Federal and State grants, as well as restricted General Fund sources such as fee-based services.
In FY2008, the top 8 General Fund revenue sources accounted for more than 50% of the total operating budget.
| Revenue Source | $ millions |
| Real Estate Property Taxes 1 | 1,397 |
| Utility user Taxes | 627 |
| Licenses, Permits, Fees & Fines | 620 |
| Business Tax | 477 |
| Sales Taxes | 349 |
| Power Revenue Transfer | 184 |
| Documentary Transfer Tax | 157 |
| Transient Occupancy Tax | 144 |
| Total “Top 8 ” Revenues | 3,955 |
What does the City spend its money on?
As a full-service city, the City of Los Angeles is responsible for providing police protection, fire services, parks, libraries, transit services, sidewalks, trash disposal, public works services, and a variety of other essential services at the level and quality expected and deserved by its residents.
Special fund monies are dedicated to specific purposes such as sanitation equipment, traffic congestion mitigation, sewer construction, storm water mitigation, and the City's contribution to rail transit.
Some of the General Fund monies are also restricted for grant supported activities, fee-based services such as animal services, permitting, and building inspections.
The unrestricted General Fund monies are expended as shown in the chart below:
It takes ten months to build a budget!
The budget process begins in September when the Mayor submits a Policy Letter to all Departments outlining his budget goals for the coming year. In November City departments, after reviewing the input of neighborhood council budget priorities, submit their budgets to the Office of the Mayor and the CAO. This is followed by a period of collaborative decision-making where the CAO, community representatives, and the City Council assist the Mayor in formulating the Mayor's Proposed Budget. The Mayor then submits the Proposed Budget to City Council on or before April 20.
Click here to view the full Budget Calendar.
What are some of the challenges facing the development of the City budget?
Cities across the country, along with the state and our federal government, are facing some of the most difficult financial times in recent memory. It is evident that the City of Los Angeles' own financial condition has worsened significantly due to macroeconomic factors, including the national housing slowdown and credit crisis, as well as other factors unique to our state, region and local economies. Lagging economic growth is generating lower than anticipated General Fund receipts.
Additionally, the City's ability to receive a transfer of water revenues from its Department of Water and Power is still under question as a result of a recent legal case. The water revenue transfer is estimated to be approximately $30 million.
The City is also confronted with employee benefits and healthcare costs that continue to rise. As key civilian labor contracts begin to expire, the City will have to be diligent in negotiating new contracts that are fair and fiscally responsible.
How can I contribute input in the development of the City budget?
Participate in your Neighborhood Council's discussion about the city budget and make your voice heard in your local community. The Neighborhood Councils also help shape the City budget.
The Neighborhood Councils are a key part of the system of reforms approved by voters in 1999. Since 2001, Neighborhood Councils all over the City of Los Angeles have been giving voice to community needs and telling the Mayor how they would like to see the City budget spent. Now is the time for you to get involved with your Neighborhood Council and make sure that your local leaders-and your Mayor-hear your voice.
For more information on your local Neighborhood Council and to find out when it will discuss the City budget, go to www.lacityneighborhoods.com or call 1-866-LA-HELPS.