Page 458 - FY 2022-23 Proposed Budget

This Revenue Forecast Report for the City of Los Angeles provides revenue
estimates for fiscal years 2021-22 and 2022-23 in advance of the City’s
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.

This Office based these estimates on information received from City
departments, consultation with local economic experts and academics, and
historical as well as recent trends.

Financial Outlook General Fund Receipts (millions)

Reserve
Current Year: 2021-22 $85 Fund
- $639 - - Transfer
The current fiscal year budget was structured on the $639 ARPA
assumptions of economic recovery. While it seems the $6,821 $7,086 Transfer
pandemic’s grip on the economy is loosening, the $6,370 General
economic picture still remains far from normal. The FY21 FY22 FY23 Fund
changes that it set in motion have proven both more Actual EstimateProjection Receipts
persistent and more pervasive than once expected.

Overall, we estimate that actual General Fund revenues will total $7.55 billion,
exceeding the budget by $42.4 million (0.57 percent), and the prior fiscal year
$451.1 million or 7.08 percent (excluding the ARPA transfer of $639.5 million
and the Reserve Fund transfer of $85.1 million). The sources leading this
strong recovery are Transient Occupancy Tax (up 97% or $107.6 million),
Sales Tax (up 24% or $123.9 million), and Documentary Transfer Tax, which
is projected to exceed last year’s record high by $51.9 million or 22%.

Next Year: 2022-23

Our projection for the upcoming year is based on the assumption that the
economy will continue expanding in 2022-23 fiscal year, even though it is hard
to get a clear picture of the post-pandemic economy.

For the General Fund, the year is expected to see 3.88 percent revenue growth
over the current fiscal year estimate as economically-sensitive revenues
continue to recover. This $7.09 billion would be $264.5 million more than
2021-22, and $715.6 million more than 2020-21. Unfortunately, due to the
ARPA and Reserve Fund transfers in 2021-22, this will be felt in the budget as
a drop of $460.0 million, just over six percent of General Fund revenue.

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