Comments
MONEY MONEY - As Los Angeles confronts one of the most severe fiscal challenges in decades, City Controller Kenneth Mejia finds his office facing pressure from two directions at once: proposed budget cuts tied to a nearly $1 billion shortfall, and a Charter Reform proposal that would dramatically reduce the Controller’s authority and staffing.
Since taking office in late 2022, Mejia—the city’s first certified public accountant to serve as Controller—has repeatedly warned that Los Angeles was heading toward a fiscal cliff. He has cited rising personnel costs, slower-than-expected revenue growth, and ballooning liability payouts as structural problems that left the city increasingly vulnerable to economic and legal shocks.
Those warnings are now colliding with budget realities—and with a governance debate that could reshape how City Hall manages and oversees public money.
A Budget in Crisis
Los Angeles entered the current fiscal cycle with a budget gap approaching $1 billion, driven by declining revenues, escalating payroll obligations, and an extraordinary volume of lawsuit and liability settlements that far exceeded what the city had budgeted.
Mejia publicly sounded the alarm early, noting that the city had been overspending relative to revenue while drawing down reserves, leaving Los Angeles less prepared to absorb the impact of fires, litigation costs, and other fiscal emergencies.
In response, Mayor Karen Bass released a proposed fiscal year 2025–26 budget that includes nearly 1,650 layoffs and the elimination of more than 1,000 vacant positions across city departments in an effort to close the deficit.
While much of the public attention has focused on cuts to police civilian staffing, transportation, sanitation, and street services, the Controller’s Office has not been immune.
Controller’s Office in the Crosshairs
Budget proposals include recommendations to eliminate positions—particularly vacant ones—within the Controller’s Office. Mejia has pushed back, arguing that trimming oversight staff during a fiscal crisis is shortsighted and potentially counterproductive.
According to the Controller, reducing positions tied to accounting, payroll approval, and financial reporting weakens the city’s ability to monitor spending in real time, manage long-term fiscal planning, and maintain accountability when every dollar matters.
But budget cuts are only part of the challenge.
Charter Reform Proposal Raises Stakes
At the same time, a motion before the Los Angeles City Charter Reform Commission’s Planning & Infrastructure Committee would go much further—by transferring core accounting and paymaster functions away from the independently elected Controller and into the hands of the City Administrative Officer (CAO), a political appointee who reports directly to the Mayor and City Council.
In a detailed letter to the Commission, Mejia warned that the proposal could effectively decimate nearly 90 percent of the Controller’s Office, reducing it largely to an audit function and stripping it of the authority that provides day-to-day financial oversight.
The Controller emphasized that audits make up only about 10 percent of his office’s work. The remaining 90 percent comes from its role as the City’s independent accountant and paymaster—maintaining the official books, supervising departmental accounts, approving payments before checks are issued, and producing legally mandated financial reports relied upon by residents, investors, and bond markets.
Why Independence Matters
Under the City Charter, the Controller has the authority to withhold approval of payments that appear improper, illegal, or unauthorized—subject to override by the City Council. That built-in tension, Mejia argues, is intentional. It prevents elected officials who decide how money is spent from also controlling when and whether checks are written.
Moving those functions to the CAO, he contends, would not “depoliticize” city finances. Instead, it would consolidate financial power in the hands of the very officials the Controller is meant to oversee, allowing City Hall to both spend the money and control the financial record of how it was spent.
Mejia also pointed to recent history in which his office’s revenue projections proved more accurate than those issued by the CAO. Overly optimistic forecasts, he argues, contributed to spending decisions that helped deepen the city’s current deficit—underscoring the need for an independent office able to deliver hard financial truths.
Transparency Tools at Risk
The Controller’s Office is responsible for widely used public tools that allow Angelenos to track city finances in real time, including:
- Revenue and expense dashboards
- Payroll databases
- Vendor payment and “checkbook” applications
These tools depend on the Controller maintaining custody of the City’s official books. Transferring accounting authority elsewhere, Mejia warns, risks delaying, limiting, or politicizing information that residents now expect to see openly and promptly.
Process and Public Trust
Mejia also raised concerns about how the Charter Reform proposal emerged—appearing as a brief item in a committee focused on infrastructure planning, rather than undergoing full public vetting through the Charter Commission’s Government Structure Committee.
He cautioned that rushed or poorly debated Charter changes could produce unintended consequences, particularly at a moment when public trust in City Hall remains fragile after years of governance scandals and fiscal stress.
What This Means for Angelenos
The combined impact of budget cuts and proposed Charter changes has real implications for everyday services and for how transparently the city manages its money. While the Mayor’s budget aims to preserve frontline services, critics argue that weakening financial oversight could leave residents paying the price later—through service reductions, higher liabilities, or future fiscal emergencies.
By design, the Controller’s Office serves as an independent check on City Hall’s financial decisions, informing both policymakers and the public. As budget negotiations and Charter Reform deliberations continue, the future size and authority of that office will shape not just this year’s budget, but the long-term financial credibility of Los Angeles.
At a time when the city is asking residents to accept painful cuts, the question is not only how much government costs—but who is watching the money, and on whose behalf.
###
