“This is certainly a tough day,” City Manager Tom Modica said as he stepped to the podium at Thursday’s press conference regarding the City of Long Beach’s proposed $4 billion budget for Fiscal Year 2027, a budget that attempts to contend with a $58.2 million structural shortfall.
But the next three minutes were like something out of Mayor Rex Richardson’s annual State of the City address, with Modica touting a long list of what’s going well in Long Beach, all the way down to minutiae such as the fact that the Clean Team collected over 1,100 tons of litter last year.
Finally, though, Modica and Richardson got down to business, tag-teaming the assembled media and interested viewers online with a dizzying array of numbers that supposedly add up to two years of lean times before everything is hunky dory.
Whether it will all work out the way they say is another matter. After all, they’ve been wrong before.
An example of that “before” came in October 2025, when the City projected that the structural shortfall for FY2027 would be $39.3 million — 48% lower than the actual figure. When asked why the projection was so far off the mark, Modica cited “some of the hardest revenue drops we’ve seen since COVID, fluctuations of funding on the federal level, […] reductions in utility taxes, property taxes not coming in as projected,” and unexpected interest rates. Whether such a projection should have better accounted for at least some of this was left unsaid.
FUN FACT: Noting that revenue came in at $21 million below forecast while expenses were roughly $20.8 million above forecast, an NBC4 reporter asked, “What did the City get wrong here, and why should residents trust the forecast you’re providing now?”
In fact, almost completely lacking from the 100-minute press conference was acknowledgement that at any point the City might have better managed its finances to prepare for the rainy day that’s come due to a perfect storm of post-COVID realities and a mingy federal regime. When pressed on the question of whether the City has made mistakes from which decision-makers can learn — such as relying too heavily on one-time revenue sources (in lieu of structural shifts), a hallmark of Long Beach financial planning for at least the last two decades — Modica defended the tactic: “We could have just been cutting [i.e., making structural changes] during the recovery. [But] we were trying to get our businesses back on their feet. […] We could have been making cuts every single year. We chose not to do that, because we had resources that were specifically dedicated from the federal government to do exactly that: to help us recover. So we made those choices. […] But now there are some of those costs that you didn’t address for a year or two.”
For his part, Richardson admitted that the City relied on oil revenue for far too long; and he at least suggested that, in terms of relying on one-time funds, things may be different going forward — if only because they have to be: “We strategically leveraged the one-time reserves instead of cutting. […] Our [City] charter says we have to pass a balanced budget every year — so you either balance it by leveraging one-time reserves or by making cuts or by finding revenue. This year, there’s no more federal one-time reserves, so we don’t want to pass on a one-time solution; we want to address it structurally, so next year and in subsequent years we have that stability that, frankly, we haven’t had for many years since COVID.”
But things won’t be stable next year, as — if things go to plan — the City will have to address a projected $27.3 million shortfall for FY2028. But first things first.
Not surprisingly, with employee-related costs making up 79% of General Fund expenditures (i.e., the only completely discretionary fund in the annual budget), the City proposes to balance the FY2027 budget largely through major staffing cuts, saving $33 million by laying off “probably […] about 200 employees currently in filled spots” (Modica), along with eliminating roughly 200 vacant positions — all in all, approximately a 4% reduction in City staff.
The effects this will have on the general public are widespread, including reducing all public libraries to a five-day service week, reduced program hours at all Be S.A.F.E. sites, eliminating teen programming at Chavez Park, reduced code enforcement, staffing reductions at the Health Department (a major victim of federal funding cuts), and eliminating between 13 and 17 police patrol positions.
Another area that will take a big hit is homeless services — this coming on the heels of a 10% increase in the homeless population over the last two years — including reduced capacity for homeless outreach (and eliminating weekend outreach); reduced capacity for the Maternal, Child, and Adolescent Health Program; reducing both homeless shuttle service and Mobile Access Centers from two vehicles apiece to one; cutting the number of motel voucher shelter rooms from 40 to 15; and reduced specialized mental health services for Multi-Service Center participants. Also, 45 fewer households will receive Rapid Rehousing assistance.
FUN FACT: Ironically, the proposed drop in the City’s net expenditure on homeless services from this year to next is exactly the same amount — $790,000 — that was spent on installing permanent fencing around the Billie Jean King Main Library to deter homeless persons from resting there — an expenditure that members of the city’s Homeless Services Advisory Committee complained “makes no sense.”
Another budget casualty is Fire Engine 14, which will be eliminated even though Fire Station 14 reopened in March 2025 after a $5.8 million “comprehensive renovation and upgrade.” The station will not close, with its ambulance continuing to serve the immediate area. (The City notes that 87% of calls to Fire Station 14 are for paramedics only.)
Amid all the cuts outlined in the proposed budget are several new expenditures. One is putting $9.8–$10 million back into the City’s emergency reserves. Primarily intended for crises such as natural disasters, the City dipped into these funds to make ends meet for both 2025 and 2026.
NOT-SO-FUN FACT: The City says that “Emergency reserves will be maintained at 8% minimum (of General Fund ongoing expenditures, including transfers) and 10% target.” However, even adding $10 million to emergency reserves will bring them to only 6% — in other words, 25% less than minimum, 40% less than the target amount.
One new expenditure that may raise eyebrows in a city contending with such harsh economic realities is the creation of a new Traffic Safety Division, which will run an Automated Speed Enforcement Program that Modica says is necessary to combat “a dramatic change in people’s behavior coming out of COVID on how they’re interacting with our streets, the amount of speeding, the amount of pedestrian death […].” The program calls for the installation of 18 “automated speed safety cameras,” plus salaries for 12 employees. When asked how much the cameras will cost to install, Modica said that “the projections show that [the cameras] will pay for themselves; the fines that come back will pay for the system — I think it’s two-and-a-half for three million dollars.” (According to earlier reporting by the Long Beach Post, “The program will cost $835,000 in the first year, with an annual operating cost of about $1.6 million.”)
Richardson emphasized that even while “navigating significant financial headwinds,” it is important for the city to keep an eye toward the future and not stop funding long-term initiatives such as Elevate ‘28, a “five-year infrastructure program made of projects dedicated to serving Long Beach parks, community and public facilities, access to mobility, and street improvements.”
“We have a lot of work to do over the next weeks,” he said. “Every budget tells a story about a city’s values. It reflects what we choose to protect, what we choose to invest in, and how honestly we confront the challenges before us. […] This budget is not simply about responding to today’s challenges — it’s [also] about protecting the progress that we’ve made together, making responsible choices in the difficult moment, and positioning Long Beach to emerge stronger and more financially secure.”
To take as deep a dive as you want into the proposed budget, go to the City’s Budget Information page to view presentations ranging from 23 to 705 pages, as well as the entire July 30 press conference (excluding media Q&A). If you want to give your input before the proposed budget is finalized in mid-September, the public is invited to attend any or all of five community meetings to be held over the next two weeks.