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L.A. budget official warns of major cuts if Congress fails to act

January 3, 2013 |  7:44 pm

City Administrative Officer Miguel Santana The top budget official at Los Angeles City Hall warned Thursday that the city could lose up to $115 million in federal grants if Congress fails to stave off automatic across-the-board budget cuts scheduled for March 1.

In a report submitted to Mayor Antonio Villaraigosa, City Administrative Officer Miguel Santana said tens of thousands of residents would be affected if the city loses out on $92 million in federal assistance for housing programs and $23 million in funding for public safety and community development. Those cuts will take place if Congress fails to act on a plan to reduce the deficit by $1.2 trillion in two months, Santana said.

The spending cuts, formally known as sequestration, were part of the American Taxpayer Relief Act of 2012, which was approved earlier this week. The legislation permanently extended several tax breaks that were slated to expire. But decisions on budget reductions were delayed to March 1 under the deal, which passed the House and Senate earlier this week in an effort to avoid the so-called "fiscal cliff."

None of the federal money now at risk goes to the city's general fund, which pays for basic services and now faces a $220-million shortfall, Santana said. But the pending reductions would affect an array of programs provided through the city's Police Department, Fire Department and other agencies, including:

-- $48 million in Section 8 housing vouchers and related programs administered by the city's housing authority.  

-- $9 million in public safety funding, including money for transporting Medi-Cal patients by ambulance.

-- $5 million for Community Development Block Grants, which pays for senior programs, day laborer sites and domestic violence shelters.

-- $3 million for the construction of affordable housing projects.

Santana called for city departments to develop contingency plans in case the money is lost.

Some of the most significant effects would be felt by an estimated 15,000 families that rely on housing vouchers. They would, on average, see an increase in their out-of-pocket costs of $116 per month, according to the report. Another 1,800 families that are on the waiting list for vouchers would not receive them, Santana said.


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-- David Zahniser at Los Angeles City Hall


Photo: City Administrative Officer Miguel Santana at Los Angeles city hall in 2010 . Credit: Don Bartletti / Los Angeles Times