LA City Forms New Panel to Tackle Long-Term Budget Issues

Los Angeles is embarking on a crucial two-year initiative to stabilize its finances, with the City Council recently establishing a new Budget and Finance Advisory Committee. This move comes months after the city grappled with a substantial $1 billion budget deficit, highlighting the urgent need for a more sustainable fiscal strategy beyond annual fixes.

Addressing LA’s Persistent Budget Challenges

For years, Los Angeles City Hall has faced a cycle of “year-to-year fixes” for its budget. Councilmember Katy Yaroslavsky, chair of the Budget and Finance Committee, proposed this advisory group to break that cycle. The city continues to contend with rising costs, weak revenue growth, unexpected departmental spending, and a reserve fund often hovering at the bare minimum. These factors, alongside challenges like wildfire recovery, underscore the need for external expertise and a fresh perspective on the city’s financial foundation.

Introducing the Budget and Finance Advisory Committee

The new five-member advisory committee held its inaugural meeting on November 24, 2025. Tasked with diving deep into structural financial issues, the group is composed of seasoned experts committed to long-term solutions. Former Los Angeles City Controller Ron Galperin was elected chair, with Jessica Lall, managing director at CBRE, serving as vice chair. Other distinguished members include L.A. Co-op Lab co-founder Gilda Haas, Derric Johnson from United Way of Greater Los Angeles, and Joseph Lumarda of Capital Group Private Client Services. This diverse expertise aims to guide the city toward fiscal solvency and stronger revenue planning.

Key Areas of Focus and Expectations

The committee’s mandate extends beyond immediate deficit closing. Councilmember Yaroslavsky has challenged the appointees to explore structural issues, from city asset management and liabilities to potential charter reforms and enhanced transparency in public spending. Former Controller Galperin emphasized a focus on sustainable budgeting and better use of city assets. The City Administrative Officer, Matt Szabo, outlined the city’s reliance on economically sensitive revenues like business and sales taxes, and stressed the importance of increasing the reserve fund from its current 5% policy minimum to a more robust 10% to withstand economic shocks.

Community Voices and Future Outlook

Local Neighborhood Council Budget Advocates, including Lionel Mares, have welcomed the committee’s formation, urging members to maintain strong ties with residents. They advocate for addressing soaring liability costs, ensuring greater oversight of homelessness spending, and preventing layoffs of city employees. Mares also called for public meetings to be held during evenings and weekends to improve accessibility for community members. The City Administrative Officer projects a potential $91 million budget gap for the next fiscal year, followed by a return to structural balance and surpluses, assuming current cuts are maintained, no recession occurs, and no major new services are added. The committee will work in six-month cycles over two years, supported by city staff and graduate fellows from UCLA, reporting its recommendations to the Budget and Finance Committee for eventual consideration by the full City Council. Their next meeting is scheduled for January 12.

Frequently Asked Questions About LA’s New Budget Panel

• Why was the Budget and Finance Advisory Committee formed?
  The committee was formed to address long-term structural financial issues in Los Angeles, moving beyond annual budget fixes, especially after the city recently closed a significant $1 billion deficit.
• Who are the key members of the committee?
  Former City Controller Ron Galperin chairs the committee, with Jessica Lall serving as vice chair. Other members include Gilda Haas, Derric Johnson, and Joseph Lumarda.
• What are the main financial challenges Los Angeles faces?
  The city is dealing with volatile revenues, unexpected departmental spending, rising liability costs, and a reserve fund that remains at its minimum required level, needing a more robust buffer against economic shocks.
• What do local residents and advocates hope the committee will achieve?
  Community advocates are looking for increased transparency in city spending, solutions for high liability costs, better oversight of homelessness funds, and efforts to prevent city worker layoffs. They also hope for accessible public meetings.
• When can we expect to hear about the committee’s recommendations?
  The committee will work in six-month cycles over two years, with its recommendations eventually presented to the Budget and Finance Committee and requiring approval from the full City Council for major changes.

For Angelenos, this new committee represents a critical step towards a more financially stable and transparent city government. Staying engaged with their progress will be vital for the future health of our local economy and public services.

LA City Forms New Panel for Budget Strategy