The Long Beach City Council will hold a study of the city’s financial outlook Tuesday as many revenue streams have turned into trickles due to the COVID-19 shutdowns.
The hearing is scheduled for 5:30 p.m. during the council’s May 19 meeting. Over the past few weeks the council has had a number of discussions about the pandemic’s impact on city finances, but this will be the first hearing dedicated solely to the city’s financial health.
Last week, City Manager Tom Modica said the projected budget shortfall this fiscal year would be as high as $41 million.
A memo released in April had previously put that projection at below $20 million, but the ongoing shutdown of businesses and hotels have blocked valuable taxes from being deposited into the city’s general fund and a glut of oil worldwide has simultaneously dropped the city’s oil revenue projections.
This is in addition to the city’s expenditures it has made in response to the pandemic, a cost the city has said has reached $14 million.
Long Beach is not alone in projecting large deficits in the future. Last week, Gov. Gavin Newsom announced that California was facing a $54 billion budget deficit, something that could impact educational institutions and other state-funded entities in the city.
The City Council is required to adopt a new budget every September, but it will first have to deal with new deficits that were not foreseen when the current budget was adopted. City officials have said in recent weeks that services and positions could likely be cut to help balance the new shortfalls.
The study session on Tuesday could shed light on early directions the council might take in terms of what departments of services could be targeted for reductions in the coming months.
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