L.A. Mayor Tightens Budget

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Faced with declining real estate-related revenues, L.A, Mayor Antonio Villaraigosa on Thursday unveiled a proposed $6.8 billion budget for 2007-08 that boosts gang prevention and public safety funding but holds the line on most other city programs.


Already dealing with a structural budget deficit estimated at $231 million, Villaraigosa said the city will no longer be able to rely on rapidly rising property values to fill the gap. The city’s main real estate-related revenue source, a documentary transfer tax on all real estate transactions, is expected to fall 15 percent in 2007-08 to $157 million, due the declining volume of transactions and flat home prices.


“This is a tough budget year and Los Angeles faces the reality of tough budgets to come,” Villaraigosa said in a press conference.


One positive note: business tax revenues are projected to increase 4 percent to $478 million, on top of an estimated increase of 6 percent for 2006-07. This is despite a more widespread implementation of business tax cuts enacted three years ago. City officials credit increased compliance and collection efforts for the jump in revenues.


The biggest funding increase $53 million is earmarked for the Police Department, primarily to step up officer recruitment and beef up anti-gang efforts. The budget does provide slight increases in staffing for both the Planning and Building Department and the Safety Department to handle a high number of development and renovation projects already in the pipeline.


The Bureau of Street Services takes the biggest dollar hit $18 million although Villaraigosa said that funds for street resurfacing would increase.

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