Page 454 - 2020-21 Budget Summary

April 15, 2020

Honorable Mayor Eric Garcetti
Honorable Members of the City Council

Re: Revised Revenue Forecast for Fiscal Years 2020-2021

Last month, my office submitted a Revenue Forecast report, which included revenue estimates for
the remainder of the current fiscal year — ending June 30, 2020 — and projections for fiscal year
2021. At the time, we projected healthy revenue growth, but warned that unanticipated economic
stress resulting from concerns about the coronavirus, along with rising employee-related expenses,
could erase that growth quickly.

Since then, the coronavirus has become a full-blown pandemic that has not just put stress on our
local economy, but turned life across the United States — and the globe — upside down. Its impact
has slowed the entire U.S. financial system; key industries, like travel and hospitality, have virtually
come to a stop, leading noted economists to opine that we have already entered a deep and
prolonged recession or worse. More than 17 million Americans filed for unemployment in just a
four-week period as millions of businesses, both large and small, closed their doors in an attempt to
slow the spread of COVID-19. Federal Reserve Chair Jerome Powell said last week that the U.S.
economy is in an emergency and deteriorating “with alarming speed.”

Our first priority as City officials is to protect and preserve the health and safety of Los Angeles
residents, something that we have all taken great pains to do. As City Controller, it is also my
responsibility to monitor the state of the City’s finances and to update you and all Angelenos on any
changes to the wellbeing of our public coffers. My hope is that these revised numbers will promote
sober and responsible budget deliberations for the coming fiscal year.

My office has revised the current fiscal year’s General Fund revenue estimate downward by
$231 million due to fallout from the coronavirus. This represents a 3.54 percent decrease from
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