I've served as chair of the City Council's Budget and Finance Committee since 2012. At that time the City was still reeling from the Great Recession, and our budget faced deficits of hundreds of millions of dollars. Former mayor Richard Riordan even opined in the Wall Street Journal that Los Angeles would need to file bankruptcy by 2014.But we didn't. Instead, we cut expenses, found efficiencies, reduced the size of the workforce, initiated pension reforms, and worked with labor to manage compensation costs. As a result, we balanced the budget and eliminated almost all of the structural deficit, and at the same time we built up the strongest reserve the City ever had in its history.
Now the City faces a new budgetary challenge that is without precedent in our lifetime. The COVID-19 crisis has caused massive economic disruption, and with it a drastic decline in city revenues, even while the city's emergency response costs mount. In response, the Mayor has proposed a 2020-21 budget with unpaid furloughs for most city employees, a hiring freeze and other significant but essential cost reductions, and reliance on much of the reserve fund that we spent eight years building up.
Today I will lead the first meeting of the Budget & Finance Committee since the crisis began. We will begin an in-depth assessment of the city's financial status and the potential impacts of furloughs in various city departments. Like other cities around the world, we will need to grapple with budget shortfalls unimaginable only two months ago, while adjusting to rapidly changing circumstances and significant unknowns. One thing is already crystal clear: no one can yet accurately predict the full extent of the loss of city revenues, but we know it will be devastating and all of the choices before us will be painful and difficult. But I know from past experience that we will get through this, together.
This meeting, like recent city council meetings, will be conducted virtually to abide by safe distancing requirements. You can watch the hearing live on Channel 35, and on the internet at: www.lacity.org/government/follow-meetings/council-committee-meetings. The live audio can also be heard at: (818) 904-9450. If you wish to participate, please call (669) 900-6833 and use Meeting ID No. 987 0899 4173 and then press #. Press # again when prompted for participant ID.