The city of Los Angeles brought in record revenue in the 2018-19 fiscal year, but its spending also jumped, according to a report released Thursday by the city controller's office, which urged leaders to bolster municipal rainy day funds.
According to the 2019 Preliminary Financial Report, the city's overall revenues increased 8.6% from the previous fiscal year to reach $9.08 billion. That figure was bolstered by all-time high revenues from property, business, sales and hotel taxes.
The reported noted that the city collected more than $70 million in cannabis business and sales taxes.
While revenue jumped by 8.6%, spending grew by 4.5% over the previous year to reach $8.23 billion. The vast majority — 75% — of that increase was due to employee salaries and benefits, according to the controller's office. Retirement costs rose by 9.1% to reach $1.2 billion.
"The city is on solid economic footing, but we have to be careful as spending is rising year after year," Controller Ron Galperin said in a statement. "To protect taxpayers and improve neighborhood services, city leaders should exercise restraint and put more money into reserves in case an economic slowdown comes our way."
Galperin noted that city expenses are expected to continue climbing in coming years to meet continued increases in employee salary, benefit and retirement obligations. He said those increases come amid the possibility of revenue slowdowns in key sectors due to U.S. trade wars.