Long Beach : Budget Shortfall Projected

The City of Long Beach could face an $18-million projected budget shortfall in the fiscal year starting in July, City Manager James C. Hankla has told the City Council. Although the financial situation is not as dire as at the start of the current fiscal year, Hankla said that the pessimistic forecast is based on rising retirement system costs, elimination of federal revenue sharing and restrictions on the federal budget.

On the positive side, Hankla said the tax base is continuing to expand because of the city’s robust economy. He said the financial picture is brightened by expansion of the city’s two largest employers, McDonnell Douglas and the Navy.

Hankla’s assessment was contained in a midyear financial review that he submitted to the City Council. Hankla projected that the budget will grow by a “modest” $4.5 million to $6 million next fiscal year, but that “it will be impossible for the city to assume either new or expanded programs unless trade-offs are made” by cutting existing services, finding new ways of saving money or finding new sources of revenue.