Los Angeles Mayor Eric Garcetti has declared a fiscal emergency for the City of Angels, as the coronavirus pandemic shreds tourism, the film and events industry — and LA’s budget.
LOS ANGELES (CN) — While the city of Los Angeles acted swiftly last month by ordering residents to stay home to slow the spread of the novel coronavirus, officials are now bracing for a crushing blow to the city budget that is expected to outpace the 2008 global economic meltdown.
On Monday, LA Mayor Eric Garcetti imposed furloughs for thousands of city employees and said the impact from city spending to mount an emergency response to the spread of Covid-19 will be felt for years to come.
LA spent $70 million from reserve funds in response to Covid-19. Some of that funding will be reimbursed by state and federal funds, but the next fiscal year will be unpredictable.
Like many other cities across the nation, LA is holding out hope for a bailout from Congress.
“Our federal government needs to step up to help states and their cities like they’ve helped corporations,” said Garcetti during his daily briefing, in which he declared a fiscal state of emergency for the city.
Councilman David Ryu says federal stimulus dollars should go to help residents with their rent and mortgage, with direct aid to small businesses.
“We have some tough budget decisions ahead, but we can’t balance our budget on the backs of working people,” Ryu said in a statement. “Without federal help, the city’s need for furloughs will cause an unintended ripple effect across our economy, as well as reduce city services when our seniors and vulnerable residents need them most.”
City employees will see a 26-day furlough or a 10% reduction in their pay. LA issued its stay-at-home orders March 19 and the city of 4 million saw its economy grind to a halt as did the 10.4 million people in the county.
Revenues have tanked, airport traffic is down 95% and hotel reservations have evaporated, said Garcetti.
“From a fiscal perspective, this is the worst it’s ever been,” Garcetti said at this week’s State of the City address where he announced the grim budget forecast. “I’ve never before hesitated to assure you that our city is strong. But I won’t say those words tonight. Our city is under attack. Our daily life is unrecognizable. We are bowed and we are worn down. We are grieving our dead. But we are not broken, nor will we ever be.”
Health officials announced preliminary findings of a serology study on Monday that randomly tested a group of Angelenos to see who has antibodies to the novel coronavirus. Findings indicate 221,000 to 442,000 adults in the county at one point had the infection, according to the early findings from the study by county health and the University of Southern California.
Garcetti said he was proud to see that less than 5% of Angelenos were infected, which means that stay-at-home orders have provided a measurable impact to the spread of the virus.
“That literally means that thousands of people are not dead. I don’t even know how to put a price on that,” said Garcetti. “Thank you. You have been life savers.”
Over the weekend, 105 people in LA County died due to the virus according to the LA County Public Health Department. The county has so far seen 13,816 confirmed cases of the Covid-19 virus and 617 people have died. Of those, 241 were residents of skilled nursing homes — 39% of all deaths in the county, said Public Health Director Dr. Barbara Ferrer.
Along with the city, the Los Angeles Unified School system will brace for a $200 million hit due to its response to the global pandemic.
Since March 18, the approximately 734,000 students in the LA Unified School District have been kept at home to avoid the spread of the novel coronavirus that causes the Covid-19 infection.
“The impact from the virus is very real in the communities we serve and the needs are very real as well,” said LAUSD Superintendent Austin Beutner in a video update on Monday.
With students and staff numbering about a million people, Beutner said there would have been a chance for them to spread the novel coronavirus to millions more.
“We closed schools before there was any known occurrence of the virus in schools to mitigate the spread of the disease,” said Beutner.
LAUSD scrambled to continue teaching and feeding low-income students during the shutdown, efforts that will cost the district $199 million by the end of the school year according to Beutner. That includes $31 million to train teachers on online teaching, another $50 million to mount summer school and $78 million to provide meals to students and families. Federal funding will cover a portion of that, but the district’s decision to feed parents as well as students will cost $40 million.
Additionally, the LAUSD board approved a $72 million bond purchase this month to send students home with laptop computers.
Statewide many of California’s 6 million students lack access to reliable connections to online classrooms. Some even lack a device to connect to the internet.
“This issue is decades in the making, but we have witnessed weeks of intensive focus and unprecedented support from the private sector,” Governor Gavin Newsom said at his daily coronavirus briefing Monday. “But we are going to need to quadruple down on this effort.”
California has gone to companies such as Apple, Google, Sprint and others to collect equipment like laptops, desktop computers, tablets and internet hotspots and will begin distributing 70,000 pieces of equipment throughout the state in the coming days.
Newsom also addressed the rise in protests throughout the nation and in California, noting many Americans are growing frustrated with staying at home and the economic conditions the lockdown policies entail.
Hundreds of protesters gathered in Sacramento on Monday morning with signs alluding to tyranny and the forfeiture of civil liberties, as some asked for the right to be able to go back to work with California entering its fifth week of sheltering in place.
“We need to have a health-first focus if we are going to come back economically,” Newsom said. “The worst mistake we could make is to make a precipitous decision based on politics and frustration and then have to go back.”
Newsom noted the numbers of new confirmed cases, hospitalizations and ICU admittances are showing signs of a flattening curve, but are not trending downward in the manner necessary for state officials to contemplate lifting lockdown orders and opening up the economy.