Page 461 - 2020-21 Budget Summary

SUMMARY

This Revenue Forecast Report for the City of Los Angeles provides revenue
estimates for fiscal years 2019-20 and 2020-21 in advance of the upcoming
budget process. Also included are the estimated requirements for debt service
and General Fund cash flow borrowing. The Forecast is issued pursuant to the
Controller’s City Charter mandate to monitor and report on all matters relating
to the City’s fiscal health, to keep the City’s official financial records, and to
supervise City expenditures.

An online interactive tool for exploring the Forecast, with 10 years of data,
may be found at lacontroller.org/revenueforecast2021. Open data for all City
financials is available online at ControlPanelLA (ControllerData.LACity.org),
including regularly-updated information on General and Special Fund
revenues.

Financial Outlook
According to the UCLA Anderson Forecast’s December 2019 report, the
national economy is expected to continue the 2% rate of growth through this

year and next. California is currently growing at approximately 2.6% annually.
The unemployment rate has fallen to 3.9%, a rate generally considered at or
close to full employment. Unemployment within the City of Los Angeles is not
as low as the statewide figure, but that rate continues to fall as well. Real
personal income growth is forecasted to be 2.1% and 1.9% in 2020 and 2021.
Los Angeles County will likely continue its long-term shift from production-
based industries like manufacturing to service-based industries, with major
growth in professional business services, health care and hospitality. Major
investments in public transit systems will continue to support strong economic

growth, although any lack of near-term mitigation of housing prices and the
homelessness crisis may limit what is otherwise likely to be strong output and
wage growth.

With this environment and assumptions in mind, we
General Fund Receipts (billions) currently estimate 2019-20 General Fund revenues
$6.82
to be $6.61 billion, 0.7 percent above the $6.57
$6.61 billion 2019-20 Adopted Budget and 6.0 percent
$6.57
greater than the prior year. Total 2020-21 General
Fund revenues are projected to be $6.82 billion,
FY20 FY20 FY21 $210 million (3.2 percent) more than the 2019-20
Budget Estimate Projection estimates.

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