Long Beach's Steep Budget Cuts Draw On Emergency Reserves: Report

LONG BEACH, CA — Long Beach officials plan to draw millions of dollars from the city's reserve funds as they work to close a growing budget shortfall ahead of the end of the fiscal year.

The Long Beach Post reports the city will use $27 million from four reserve accounts, including $16.5 million from its emergency reserve, as revenue falls short of expectations while expenses continue to rise.

According to the newspaper, city revenue is projected to come in about $21 million below budget this year while expenses are expected to exceed projections by about $20.8 million.

City Manager Tom Modica said broader economic conditions have strained the city's finances. The report says lower utility tax collections, weaker-than-expected Measure LB revenue and rising operating costs have all contributed to the shortfall.

Modica is scheduled to present his proposed fiscal year 2027 budget on July 30. In an email to city employees, he said the spending plan will include "very difficult changes" for both residents and city staff as officials work to restore the city's finances and rebuild reserve funds.

The proposed budget will be considered by the Long Beach City Council before a final spending plan is adopted by the end of September.

Read more at the Long Beach Post.