The city of Los Angeles has not been alone in struggling fiscally, so many may be surprised to learn the city has lagged behind other local governments when it comes to spending federal stimulus dollars. To be exact, Los Angeles has only spent a quarter of its funds, despite acquiring more than $630 million in stimulus grants. So why the lag in light of budget cuts, layoffs, and a shortfall of reportedly $427 million? The LA Times reports that “L.A. officials say they have been hampered by a painful irony. As millions of federal stimulus dollars flowed in the door, the city was reeling from cost-cutting measures that led to the exodus of 2,400 experienced workers through an early retirement program and more than 360 layoffs.” By mid-October, Los Angeles has only finished eight of its 108 projects and its spending rate fell way behind other big Californian cities, as well as other big cities like New York and Chicago. The Time also notes:
“The effect of the unprecedented reduction of the city's staff, officials said, was compounded by initial confusion about the stimulus program's rules, conflicting interpretations from state and federal officials about how the money could be spent, and the snags that come with launching new programs from scratch. ’What's happening here is happening everywhere, not just in California, but around the country,’ Santana said. Yet other local governments under strain have dealt more swiftly with stimulus dollars, suggesting that at least part of the problem is the slow — and in some cases dysfunctional — city bureaucracy that has frustrated residents and business leaders for years.”
Scrambling to secure funding from any source without actually having concrete plans as to how such funds will be spent is an issue, and like Los Angeles, the state overall has also not spent a majority of its $50-billion share of stimulus money. Outgoing Inspector General Laura Chick stated that “Right in the middle of the crisis, government is being asked to operate better and faster. It's not reality based. How do you move projects quickly so that they turn into jobs on the street when there are 20,000 hoops to jump through?" For more on the spending of the funds, see here.