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The 2021-2022 Los Angeles City budget is currently regarded as an ambitious effort to address inequity in the city. Mayor Eric Garcetti’s new budget will provide unprecedented funding for homelessness, racial equity, and other social service programs that support Los Angeles’ most marginalized populations. The budget will go into effect on July 1, 2021, and currently totals $11.2 billion, about $700 million more than the previous year’s. Deemed the “Justice Budget,” Garcetti has declared that it “is more than a financial document — it’s a dynamic roadmap to a city built on justice and equity.” 

The budget will pilot several bold and equity-driven programs. First is the Therapeutic and Unarmed Response for Neighborhoods (TURN) program to address public safety and the over-use of policing for public safety. Next, is The Basic Income Guaranteed: L.A. Economic Assistance Pilot (BIG: LEAP), the nation's most considerable program piloting guaranteed income and providing $1000 per month to 2000 households. Also included is the LA REPAIR (Reforms for Equity & Public Acknowledgement of Institutional Racism) Innovation Fund, which supports racial justice, healing, and reconciliation. Lastly, the budget calls for creating a Reparations Commission, tasked with exploring a pilot slavery reparations program for Black residents of Los Angeles City. 

The 2021-2022 budget also allocates funds to established programs. One of the budget’s priorities is restoring funding for the ongoing operation of pre-pandemic city services that were reduced or eliminated because of budget cuts forced by the pandemic. On average, city services will see a 9.4% increase in pre-pandemic allocations. Additionally, the budget expands the Gang Reduction Youth Development (GRYD) program to provide youth opportunities and increases investments in homelessness programs, including Project Roomkey and the Comprehensive Cleaning and Rapid Engagement (CARE/CARE+) programs.

The SCG Public Policy Team has provided a breakdown of the budget’s key investment areas below. 

Budget Breakdown

Revenue received from the American Rescue Plan

The 2021-2022 budget includes $777 million in spending from the American Rescue Plan. This funding was obtained through aggressive advocacy on behalf of the City of Los Angeles and was considered a win by the Mayor. The funds from the American Rescue Plan will strengthen Garcetti’s plan and assist the Angelenos disproportionately impacted by the pandemic. The breakdown of the American Rescue Plan’s revenue is as follows: 

  • $151 million going to equity and justice programs

  • $281 million for homeless services 

  • $282 million to restore vital services

  • $64 million for COVID-19 response and recovery

 

COVID-19 Response & Recovery 

The 2021-2022 Budget includes $143 million in resources to address COVID-19 response and recovery. Bolstered by the American Rescue Plan, the funds allocated to COVID-19 testing and vaccines will help “end the pandemic” in Los Angeles and aid the city in emerging from the crisis. Garcetti also intends the pandemic recovery funds to “rebuild the city” by offering financial support to the Angelenos most economically devastated by the crisis, including L.A.’s street vendors, small businesses, and restaurant owners operating in low-income communities across the city. 

  • $75 million for ongoing funding for testing, PPE, and vaccines 

  • $25 million to provide a small-business recovery fund. The fund’s “comeback checks” will provide micro-grants to small businesses.

  • $1.9 million to support a permanent LA Al Fresco program to offset the costs of creating an outdoor dining space for restaurants in low-income communities.

  • $5 million for a marketing campaign to increase tourism and assist businesses in the hospitality industry decimated by the pandemic’s impact on travel and tourism.

  • $1.3 million to assist sidewalk vendors in purchasing carts and obtaining licenses and certifications.

 

Equity and Justice

The Mayor’s team considers the 2021-2022 LA City Budget to be “the most progressive spending plan in L.A.'s history” due to its record-breaking $1 billion allocation to equity and justice initiatives. The plan aims to advance racial and economic justice across the city by investing in critical areas such as youth services, public safety, and workforce development while also piloting innovative new programs that will explore universal basic income, reparations, digital access, and more. 

  • $33 million to expand the City’s Gang Reduction and Youth Development Program (GRYD)

  • $24 million for BIG: LEAP, America’s most extensive guaranteed basic income pilot to date

  • $18.7 million to fund new programs founded on Therapeutic and Unarmed Response for Neighborhoods (TURN), a community-based approach to reimagining public safety.

  • $8.7 million to employ high-barrier young adults to clean and beautify communities.

  • $5 million for stipends for the Angeleno Corps, a program for youth in environmental justice, community-based wellness, immigration, and closing the digital divide. 

  • $3.5 million to train and pay 1,000 low-income high school students to home-tutor young siblings who have struggled with distance learning.

  • $10 million to the REPAIR Innovation Fund to support racial justice, community intervention, and reconciliation.

  • $3 million to support the Social Equity Program within the City’s Department of Cannabis Regulation and promote equitable ownership and employment within the cannabis industry.

  • $2.1 million for Get Connected LA (GCLA) to provide Wi-Fi access points in communities and create innovation zones for businesses and residents.

  • $500,000 to build a Reparations Commission.

 

The pilot programs will offer an opportunity to explore new approaches to tackling inequity across the city and hopefully serve as a model for others working toward racial and economic justice in their communities. Moving forward, philanthropy should monitor the development and implementation of the pilot programs. In addition, once the one-time funding is exhausted, funders should be prepared to support the initiates through advocacy, new partnerships, and investments. 

However, while the plan as a whole makes a significant effort to center the needs of the city’s most marginalized populations, activists are expressing concern at the increase in funding for L.A.’s Police Department. Garcetti’s budget increases LAPD’s funds by 3% from last year to account for an “uptick of violence” and officer retirements. Some L.A. activists are elevating the contradiction in the budget’s expressed interest to “reimagine public safety” while also increasing LAPD funds, an approach they say does not center equity or community needs. Driven by last summer’s protests and demands against police violence, activists are continuing to advocate for decreased police presence and reinvestment of funds into communities themselves. 

Homelessness/Housing

Facing increased criticism and demands to address the growing rate of homelessness in the city, Garcetti has dedicated a larger portion of the 2021-2022 budget to tackle the issue through a multi-pronged approach. The 2021-2022 budget proposes the most significant investment in L.A. history to confront the homelessness crisis at $791 million, which more than doubles its current spending. In total, with carryover state and federal funding from last year included, the City is projected to spend $955 million to confront the homelessness crisis. The most considerable portion of the budget, about $350 million, is directed toward building apartments for formerly unhoused people, with subsidized rent and social services. While many commend the increase in allocated funds, others highlight that the total amount is still only half of what New York City designates to addressing homelessness.

Highlights include:

  • $362 million for 89 projects and 5,651 total housing units through Proposition HHH

  • Nearly $200 million for the development of affordable housing, homeless prevention, eviction defense, and other homeless services. 

  • $57 million for nine additional CARE+ teams and eleven new regional storage facilities.

  • $43 million for Project Roomkey. 

 

Climate Change

Garcetti stated that it is “time to go big, go bold, go green” and that Los Angeles would help lead the way. Alongside funding the city’s new Climate Emergency Mobilization Office, which will coordinate “the actions of the Mayor’s Office, City Council, and community leaders to meet the commitments of L.A.’s Green New Deal,” Garcetti made the following commitments: 

  • Get L.A. to 80% renewable energy and 97% carbon-free energy by 2030. 

  • Get L.A. to 100% carbon-free energy by 2035. 

 

Looking Ahead: Opportunities for Philanthropy

The Los Angeles City Council unanimously approved Garcetti’s 2021-22 fiscal year budget on May 20th, 2021. After the budget is updated with the changes approved during council discussion, it will receive a final vote. The council has until June 1, 2021, to send the budget to the mayor's desk for a final signature.

Throughout the pandemic, philanthropy and its nonprofit grantees shouldered incredible financial strain as they stepped up to support communities affected by the crises and fill the gaps left underfunded by governmental sources. Bolstered by the additional $777 million in funding from the American Rescue Plan, this year’s budget, if approved, will be a critical aid in supporting the communities in Los Angeles most impacted by the pandemic and systemic inequity.

Los Angeles’ 2021-2022 budget allocation aligns with the philanthropic sector’s growing commitment to racial equity and “building anew '' a more equitable Los Angeles. The budget’s priorities are also consistent with nearly many issues championed by the SCG network last year, including recovery, racial equity, housing/homelessness, workforce development, and many others. However, while many commend the budget’s step in a bolder direction, others question its limitations, especially around reimagining public safety and effectively addressing homelessness. 

Even with this apparent light on the horizon, now is not the time for the philanthropic sector to become complacent. Much of the funding proposed offers one-time allocation without a sustainability plan and may not reach those communities most in need. If the additional programs and funds do not meet the needs of all vulnerable Californians, or if there are challenges in reaching sustainability, philanthropy should be prepared to mobilize on behalf of the communities they serve. The past year highlighted the strength of the partnership between philanthropy and government, and this relationship will continue to be paramount to the long-term recovery of our region.

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