Though West Hollywood's city government is less dependent on federal dollars than other more populous municipalities such as neighboring Los Angeles, Weho won't escape the fallout of a plunge off the proverbial "fiscal cliff."
Congress and President Barack Obama in 2011 agreed to make across-the-board cuts to defense and discretionary spending of about $110 billion per year over 10 years if Congress did not come up with new revenue or specify other cuts by Jan. 1.
As part of the deal last week to avoid income tax increases on most Americans, Congress delayed the cuts until March 1.
"The city of West Hollywood does not heavily rely on federal funding, so there will be very little impact on the city’s budget," Finance Director David Wilson said in an email to Patch. "However, our community like others around the nation will feel impacts of the federal budget cuts. "
Wilson provided the following examples of how the community could be adversely affected if Congress' budgetary axe starts to fall:
The city issued $35 million in Build America Bonds for the library project that the federal government agreed to pay 35 percent of the interest as part of the 2009 stimulus package. The federal cuts will reduce its obligation by 7.6 percent, increasing the city cost by about $210,000.
The city currently receives about $250,000 in Community Development Block Grant funds that we plan to use for capital maintenance in eligible areas next fiscal year. We are estimating a 10 percent reduction, $25,000, in CDBG funding.
The city’s contracted services from the Los Angeles County Sheriff's Department will remain the same, however, the county CEO’s office is reviewing the federal cuts to public safety to ensure any county-wide impacts are mitigated.
Our community will feel "trickle down" effects if programs such as Social Security, Medicare and medical benefits experience cuts, a rise in eligibility ages or standards, or an increase in the share of cost for participants.
The extension for unemployment benefits appears to be safe for now, but if extensions are cut then our community members will be impacted.
If the budget cuts inhibit a recovery from the recession, our community members whose employment is episodic and dependent on hospitality, entertainment, media and retail will continue to struggle.
In contrast, Los Angeles faces a much bleaker scenario if federal funding stops.
L.A. could lose up to $115 million in funding by July for housing, community development and public safety programs, according to the city's top budget analyst.
City Administrative Officer Miguel Santana last week said the scheduled federal budget cuts would slash about $23 million for Los Angeles public safety and homeland security initiatives and $92 million for local public housing assistance and support services.
Among the most severe cuts would be a $48 million reduction in Section 8 housing vouchers for low-income families. The cut would force about 15,000 low-income families to pay an extra $115 per month for housing and is likely to jeopardize many families' housing assistance, Santana said.
The police and fire departments are expected to lose almost $8 million that pays for analysis of DNA crime kits, a program to fight internet crimes against children and an effort to reduce rape in prison and detention facilities.
Santana said in late December the cuts could force the mayor and city council to consider layoffs of positions funded by grants.
"To the extent that the federal funding is supporting specific positions, that would be an option to consider," Santana said. "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."
Los Angeles is facing a budget deficit of well over $200 million for the fiscal year that begins July 1.