Los Angeles County could see a $1-billion decline in sales tax revenue this fiscal year, which ends June 30, because of the massive economic impact of the coronavirus outbreak.
The decline is expected to surpass $2 billion between now and the end of fiscal 2021, according to county estimates released Wednesday.
The county is spending millions responding to the COVID-19 crisis, and officials anticipate working with state and federal leaders in the months ahead in hopes of seeing reimbursement.
“The budget outlook is critically important for Los Angeles County to allocate resources effectively and to plan for the essential programs and services residents rely on in all of our communities,” Supervisor Kathryn Barger, chair of the L.A. County Board of Supervisors, said in a news release. “As we continue to collaboratively address the COVID-19 public health crisis, we remain committed to meeting the needs of residents across L.A. County.”
Chief Executive Officer Sachi A. Hamai has imposed hard freezes on hiring and purchasing, and has directed county department heads to prepare for “a range of potential program reductions in the coming fiscal year.”
“These are significant losses which unfortunately will have a major effect on programs that the county administers on behalf of our 10 million residents,” Hamai said. “Our aim is to work with our departments and the Board of Supervisors to prioritize needs and ensure that Los Angeles County continues its vital role as the safety net for our most vulnerable residents.”
County leaders will likely have to make extensive adjustments in future budget phases to address revenue shortfalls and rising expenditures because of the crisis.
The recommended budget for fiscal 2020-21 — the majority of which was prepared before the pandemic — will be presented to the Board of Supervisors on April 28.