Los Angeles could experience a significant drop in revenue in the upcoming budget year, fueled in large part by the financial downturn triggered by the coronavirus pandemic, City Controller Ron Galperin said Wednesday.

The city’s general fund — which pays for police officers, firefighters and other basic services — could see its tax revenues come in as much as $598 million below projections from earlier this year, depending on how long the crisis lasts, Galperin said in a memo updating city leaders on his financial projections.

Under that scenario, the city would experience a year-to-year decrease in revenue of $160 million, an amount that would be “very significant,” Galperin said in an interview.


Under a more favorable economic outlook, one that has the shutdowns ending earlier, revenues could come in $194 million below previous projections, leaving the city with a modest increase in overall revenue.

“We are using ranges because the economic situation is uncertain and could remain so for months,” Galperin said in his memo. “It is unclear exactly when and how our economy will rebound.”

Garcetti is scheduled to release his budget on Monday for the fiscal year that starts July 1. On Monday, the mayor said there was “no question” that next year’s budget would include cuts.


A big chunk of the city’s developing budget woes are due to a more than 70% drop in tourism activity, Galperin said in his memo.

For example, tax revenue from hotel beds and home sharing is currently 30% below the projections offered a month ago, he said.