Inglewood is facing a $30.8M budget deficit. A ballot measure could have major impact

This story first appeared on The LA Local.

Inglewood is staring down the barrel of a $30.8 million budget deficit next year, the city’s largest in at least two decades, but officials said locals don’t need to be worried. 

Inglewood’s budget ballooned after SoFi Stadium opened in 2020. City officials roughly doubled their spending from the general fund — the pot of money that pays for basic services from police to parks. 

Revenue also boomed in the first few years after the stadium’s opening, but since then hasn’t quite kept up with what’s been spent. 

City officials downplayed the projected deficit last week, saying in reports and presentations that reserves of more than $150 million will cover the gap this year and that they expect increased tax and other revenues to help take care of the problem in the future.  Mayor James Butts said locals have no reason to worry, and that the city’s reserves have enabled officials to be ambitious in their planning. 

Whether they have to dip into those savings at all depends on how locals vote for a ballot measure on Nov. 3. Officials predict Measure AT could wipe out the deficit entirely by bringing in as much as $45 million to $50 million extra in taxes on tickets to major events.

But_, if Inglewood continues to spend more than it takes in over the coming years and pulls too much out of its reserves, city officials could be pushed to lay off staff and cut funding for services, as they did during a fiscal crisis 15 years ago.

The City Council approved the budget proposal in a 4-0 vote at its Tuesday meeting. Councilmember Eloy Morales Jr. was absent.

Here’s a breakdown of Inglewood’s budget

Inglewood’s annual general fund revenue has grown by about $100 million over the last 10 years, driven in large part by increased property taxes and admissions tax.

But that growth has plateaued over the last five years, while expenditures continued to grow. The city plans to spend $279 million out of its general fund this year, more than double its annual spending prior to 2020.

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The city’s total budget is $675 million. It includes the general fund as well as special funds that pay for things like major construction projects and affordable housing.

Police take the largest bite out of Inglewood’s general fund, followed by the public works and parks departments.

Outside the general fund, the city has also budgeted $239 million for capital projects.

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Some of Inglewood’s largest sources of general fund revenue are property tax, sales tax and admissions tax. 

Property tax revenue has grown by leaps and bounds over the last five years, according to budget documents, but admissions tax and sales tax haven’t matched the growth.

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Officials hope city reserves and a ballot measure will fill the deficit

Inglewood has had budget issues before. The deficit approached $18 million in 2010, just before Mayor James Butts was elected, while reserves fell to around $11 million.

This time around, officials say Inglewood has over $150 million in reserves. 

Butts said those reserves have allowed the city to take an aggressive approach to improving streets, traffic lights and other city infrastructure.

“We put the money there because we want the city to be rehabilitated,” Butts said.

Pulling from reserves, though, isn’t something a city can do indefinitely. City Manager Louis Atwell wrote in a budget report that staff expect tax revenue to keep increasing and new developments to give the city an additional boost. With staff keeping an eye on operating costs, Atwell wrote, those revenues would narrow the city’s budget gap down the line. 

This year’s election could also come into play. The two city ballot measures voters will see — AT and BB — are the product of a larger battle between the city and its stadiums over billboard advertisements and the development deal that brought SoFi Stadium to Inglewood.

Either measure could have a substantial effect on the city’s books. 

Inglewood currently pulls in a 10% tax on SoFi Stadium tickets, but with an annual ceiling on how much the city can get. Measure AT, backed by billboard company WOW Media, would remove the cap and add a new 2.5% tax for the Intuit Dome.

Officials estimated it would bring in between $45 million and $50 million extra annually, more than enough to cover the city’s current deficit. Atwell cautioned, though, that the figures aren’t guaranteed and could depend on economic conditions, the timing of the measure’s roll-out and other factors. 

On the flip side, officials said Measure BB could curtail billboard fees and ratchet the deficit up to almost $39 million. 

The initiative would ban most commercial advertising on the large video billboards that have cropped up along the city’s main roads. Measure BB would cut off a revenue stream that, according to past budget documents, has brought the city between $3 million and $7.5 million. 

City officials itemized how much Inglewood made from billboards in each of the last 10 years, but did not do so in this year’s budget. 

The ballot measures are just a few items on a packed Inglewood ballot that includes elections for mayor, two city council members and three Board of Education trustees.