Fiscal Cliff: Los Angeles Could Lose Millions if Congress Can't Reach Deal

L.A. City Hall. | Photo: Kansas Sebastian/Flickr/Creative Commons License

Los Angeles could face at least a $22 million hit if a deal is not reached in Congress by Tuesday to avoid the so-called "fiscal cliff," a combination of severe federal budget cuts and across-the-board tax increases, the city's top budget analyst said Friday.

City Administrative Officer Miguel Santana called his prediction preliminary, saying the financial hit to the city is likely to go higher if a deal is not reached.

The city would see about an 8 percent to 10 percent reduction in grants that support the Police and Fire departments and services for the homeless and senior citizens, Santana added.

The hits could affect the LAPD's DNA labs, which recently cleared a longstanding backlog of DNA rape kits, a program to fight internet crimes against children, and specialized homeland security operations.

Santana noted that the cuts could force the mayor and City Council to consider layoffs of positions funded by the grants. "To the extent that the federal funding is supporting specific positions, that would be an option to consider," he explained. "We would not want to be in a situation where the general fund is being used to support those programs at a time when the general fund is already running a deficit."

Cuts in federal funding also are likely to affect transportation projects, Santana said.

If a deal is not reached in time, Santana would include an analysis of the effects to city finances in his mid-year financial status report due out in late January.