(The Center Square) – The City of Los Angeles didn’t spend more than 1/3 of its $1.3 billion homelessness budget in 2024 due to government dysfunction, City Controller Kenneth Mejia reported.
Mejia blamed “cumbersome” processes, “obsolete” technology, and “absence of real-time data analysis” for producing a “sluggish, inefficient approach that is incompatible with timely spending.”
The $513 million in unspent funds either rolls back to the general fund, which is “broke” due to lawsuit payouts, or stays in special funds to be spent in future years. In an earlier report, Mejia said the city is taking out at least $80 million in loans this year to cover lawsuit payouts.
“Special funds are not in trouble,” said Mejia. “The majority of homelessness underspending is coming from Special Funds,” suggesting the city still could spend these funds.
“So if there’s overspending by departments and high liability payouts, which is what is happening, the General Fund is in trouble,” continued Mejia.
The U.S. Census has found Los Angeles’ population has been in decline since 2020, and commercial real estate firm CBRE says its office vacancy rate is 24%. Population decline and fewer businesses are putting significant stress on city revenues, which Mejia says could be $158 million lower than first projected.
Mejia also noted before he took office, the city was not tracking homelessness spending. A state audit found California did not sufficiently track or evaluate $24 billion in recent state homelessness spending.
