Facing massive budget shortfall, Long Beach looks to the state for relief

Long Beach lost out on direct funds from the federal government to assist with mounting costs associated with the coronavirus pandemic, but efforts to lobby state officials to fill some of the void appear to have paid off.

The city, which is facing at least a $41 million budget shortfall this fiscal year, would have received as much as $80 million from the federal government—but fell about 30,000 residents short of the threshold to receive funds set aside for big cities.

The city now expects to receive a “significant” sum, albeit smaller, from the state. In his May budget revision, Gov. Gavin Newsom set aside $450 million to be shared by cities that did not receive direct payments from the federal government, with half of that going to seven cities with populations above 300,000 but below the federal threshold of 500,000.

“Our city would be in a very difficult position financially had it not been for the governor’s proposal,” Mayor Robert Garcia said at his Friday media briefing.

The exact amount the city would receive will likely be published by the state in coming days, the mayor said.

Under the governor’s proposal, cities under 300,000 would receive funds through their county, which will get a share of $1.3 billion depending on their population.

The state as a whole received $9.5 billion from the federal CARES Act. The six cities in California with more than 500,000 residents received direct payments totaling $1.5 billion.

Sacramento, for example, has a population of just over 500,000 people and received close to $90 million through the CARES Act. Long Beach, just a few thousand residents shy of that, received nothing.

If not for the state’s intervention, “that would have been devastating to Long Beach,” Garcia said, adding that city officials are also still lobbying Los Angeles County for a portion of the funding it received.

The funds must be used toward homelessness, public health, public safety, and other services to combat the COVID-19 pandemic.

In addition to Long Beach, other large cities that lost out on federal funds include Oakland, Bakersfield, Anaheim, Santa Ana, Riverside and Stockton.

Long Beach, with a population of 470,000 people, is the largest of those cities—and the only one with its own health department. The city would have received about $80 million from the federal government had it qualified, according to an April 27 letter signed by the seven mayors to the governor.

Cities across the state have incurred mounting expenses related to the health pandemic, including investments in homeless services, testing sites and creating surge capacity for hospitals.

“The need for Coronavirus Relief Fund allocations to our cities is essential,” the mayors wrote.

Long Beach expects deficits associated with the pandemic for years to come. Loss of sales tax revenue, oil revenue and other taxes will take a heavy toll on the general fund, which pays for basic services like police and fire.

The city must approve its budget by Sept. 30.

Garcia said the city is hoping the federal government passes another stimulus package under consideration by Congress, which would include direct aid for all cities with at least 50,000 residents.

The governor’s May budget revision, released Thursday, includes $14 billion in budget cuts to stem an estimated $54 billion budget deficit. The budget must be approved by the California Legislature by June 30.

Support our journalism.

Hyperlocal news is an essential force in our democracy, but it costs money to keep an organization like this one alive, and we can’t rely on advertiser support alone. That’s why we’re asking readers like you to support our independent, fact-based journalism. We know you like it—that’s why you’re here. Help us keep hyperlocal news alive in Long Beach.

Melissa has been a journalist for over two decades, starting her career as a reporter covering health and religion and moving into local news. She has worked as an editor for eight years, including seven years at the Press Telegram before joining the Long Beach Post in June 2018. She also serves as a part-time lecturer at Cal State Long Beach where she teaches multimedia journalism and writing.
- ADVERTISEMENT -

More