As it battles COVID-19 crisis, Los Angeles County braces for major decline in sales tax revenues

Los Angeles County’s economic outlook has taken a hard hit from the COVID-19 crisis, with officials forecasting a $1 billion decline in sales tax revenue this fiscal year ending on June 30, 2020.

Looking ahead, the sales tax decline is expected to surpass $2 billion between now and the end of the next fiscal year on June 30, 2021.

At the same time, Los Angeles County is incurring heavy expenses in responding to the crisis and will be working closely with the state and federal government in the months ahead on issues of potential 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,” said Supervisor Kathryn Barger, Chair of the Board of Supervisors. “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.”

In anticipation of the economic challenges ahead, 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.”

The recommended budget for fiscal 2020-21—prepared in large part before the COVID-19 crisis was declared a global pandemic—will be presented to the Board of Supervisors on April 28.

Extensive adjustments are expected in future budget phases to address revenue shortfalls and rising expenditures due to the crisis.

In a media conference call hosted by the National Association of Counties on Wednesday, Los Angeles County leaders called on Congress to provide additional assistance, including enabling local municipalities to use federal relief funding to address lost revenues suffered due to COVID-19.

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