By Jose Navarro, MBA | The Navarro Report
Long Beach adopted its FY2027 budget this month with a $58.2 million structural deficit to close. The solution: eliminate 483 city positions, 263 of them currently filled, raise parking citations to $100, increase street sweeping fines, and hike the cannabis tax. It is the toughest budget the city has faced since the Great Recession — and it was, to some degree, a choice.
City Manager Thomas Modica framed the cuts as necessary after five years without reductions. That framing is accurate, and it is also the key fact in this story. For five consecutive fiscal years, Long Beach maintained staffing and service levels without making structural adjustments to align spending with revenue. When the revenue picture changed — driven by tariff-related inflation, slower-than-expected sales, property and utility tax shortfalls, and roughly $300 million in federal funding lost or delayed under changing federal priorities — the structural gap that had been quietly accumulating became impossible to defer.
A financial controller does not read this as negligence. In each of those five years, city leaders made what are defensible choices: preserving services to a population that depends on them, avoiding layoffs in a labor market that makes replacing institutional knowledge difficult, and betting on revenue recovery. What they did not do — and what this budget now makes visible — is build the structural flexibility to absorb a revenue shock when it arrived. Reserves were available but sized for ordinary variation, not for a simultaneous drop in multiple revenue streams alongside a federal funding retraction that removed $221 million from the Public Works Department alone.
The resulting budget is a document of concentrated pain. Libraries that offered six days of service will offer five. Parks programs face reduction. Chavez Park and the Homeland Cultural Center lose programming. The city avoided eliminating fire engine and patrol positions — the council restored roughly 70 jobs through redirected and outside funding, including $7 million from Measure ER, a county health funding measure — but the 263 people who hold currently-filled positions facing elimination represent real institutional capacity the city will spend years rebuilding.
What the Long Beach budget also demonstrates is a pattern that is not unique to Long Beach. Across Los Angeles County, cities that came through the COVID era with federal stimulus cushions are now confronting what happens when those cushions expire and underlying revenue structures prove insufficient to carry pre-stimulus service levels. Modica said the cuts are intended to be short-term, and city officials are projecting any structural deficit will be resolved within the current budget window. That projection assumes a tourism recovery that is tracking ahead of Los Angeles, San Diego, and Anaheim — a data point city officials cited with some optimism.
Whether that optimism proves warranted, the 263 filled positions being eliminated represent the actual cost of five years without structural adjustment. For the employees losing those jobs, the timeline of recovery is less relevant than the fact of the loss. For the residents losing library hours and park programming, the question is not whether the city will eventually return to prior service levels, but when — and what will have been lost in the interval.
The budget passed. The cuts are real. And the structural lesson — that deferred adjustment compounds the eventual reckoning — is one that cities across the county will need to read carefully as federal funding uncertainty continues into the next fiscal year.
Jose E. Navarro, MBA, is a financial controller and founder of The Navarro Report, a public finance and government accountability publication based in San Diego, California.
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