On Jan. 31, Los Angeles City Controller Ron Galperin released the city’s Annual Financial Report for fiscal year 2019, which details L.A.’s finances and raises a number of issues to watch. The 400-plus page report is also available in a brief and accessible online version that contains a data story, graphs and charts – all of which illustrate how taxpayer dollars are spent by the city.

“Los Angeles experienced revenue growth in the last fiscal year, but spending jumped significantly as well,” Galperin said. “We know that the cost of providing neighborhood services will continue to rise, and the potential for a slowing economy should never be far from our minds. The city must be disciplined in its budgeting, grow its reserves and manage its special funds more transparently.”

In FY19, total city revenues increased 13.7% to $18.2 billion, due to money coming in from the city’s airports, harbor, and water and power utility, along with strong growth in property tax, sales tax and accrued grant revenues. Overall expenses went up by 7.5% to $15.1 billion, largely from higher salaries and benefits.

In his report, Galperin noted several issues to watch.

Galperin noted that while it is unclear whether city revenues will keep climbing, it is undeniable that expenses will go up as recently adopted city employee pay and benefits increases kick in. Pension costs will also increase in the coming year because recent investment returns have dropped from 9% to 6%, a number lower than the city’s target rate of return.

In addition, the city’s retiree health benefits are a net liability of $2.8 billion and are currently 68% funded. This will remain a cost to the city going forward, but Los Angeles is doing far better than other large cities. New York’s current unfunded liability is $108 billion, and Chicago and Houston are 0% funded.

For information, visit lacontroller.org/cafr2019.