LONG BEACH : Financial Gains Lower Projected Budget Deficit

The city's financial picture has improved slightly in recent months, leading officials to revise next year's projected budget deficit downward to the $11-million to $14-million range from $20 million.

City Manager James C. Hankla attributes the rosier outlook to cost-cutting measures within city government and a rebound in the local economy. But even with the reduced deficit, the city still may have to lay off some employees during the next fiscal year, which begins July 1, he said in a report to the council last week.

The city's $288.4-million general fund budget--which pays for basic city services such as police and fire protection, parks, recreation and libraries--was balanced with $20 million that cannot be counted on in 1995-96. As a result, city officials were getting ready to cut spending by that amount next year.

Earlier this year, Hankla put a freeze on hiring and asked most city departments to spend only 97% of their 1994-95 budgets. The result was $2.8 million in savings.

At the same time, the local economy began to pull out of the recession, said Ed Hatzenbuhler, the city's budget bureau manager. One sign of the city's improving health is a 12% increase in sales tax revenues from last year. Long Beach hotels are also doing much better business, with 20% more bed taxes going to the city this year than last year.

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