One day after Los Angeles Mayor Antonio Villaraigosa issued a warning about the city's projected $271-million budget deficit, a municipal watchdog reiterated the concern and called for steps to rein in spending.
City Controller Laura Chick said a persistent imbalance between revenue and expenses -- aggravated by budgeting gimmicks she called "smoke and mirrors, games and magic" -- could land Los Angeles in a financial crisis.
Repeating a theme sounded by Villaraigosa, Chick said the city should refrain from quick fixes, such as using one-time funds to pay ongoing bills.
She also called for increasing the city's reserve fund, from its current 3.3% of general fund revenue to 5%, over the next decade.
"We need to start talking about the [funding] gap," the controller said. "What are we going to do about this?"
Chick released revenue projections for the fiscal year that begins July 1, saying the city can expect $3.9 billion in its general fund, the same number used by Villaraigosa.
Citing the research of several economists, she said she expected the local economy to continue growing next year, but at a slower pace. That probably will depress some of the city's key revenue sources, including property taxes and real estate transfer taxes.