Los Angeles officials are putting money aside to weather the next recession — and other U.S. cities are squirreling away their own rainy-day money as well, The Wall Street Journal reported.
The nation's second-largest city has set aside close to $500 million across several funds in case of emergencies or financial shocks, Matt Szabo, Mayor Eric Garcetti's top budget adviser, told the Journal — noting reserves of $192 million were not enough to get through the recession from December 2007 to June 2009.
"It was an extraordinarily dark time in the city, and we are resolved never to go back," he told the news outlet. "Those of us who've lived through the recession understand that we are overdue."
L.A. is not alone: Many cities do not lock away money in formal rainy-day funds, but they do set aside excess revenue as reserves, the Journal reported.
For example, Denver's policy has been to keep reserves equal to between 10 percent and 15 percent of its annual general fund — and it expects to end 2019 with about $221 million in reserve.
In Las Vegas, city officials are building up reserves, which recently stood at $132 million, 55 percent more money than it had set aside before the last recession, the Journal reported.
Cleveland has built up its rainy-day fund to about $30 million, after adding $12 million since 2017 — though finance director Sharon Dumas told the City Council last month she thinks the city needs $160 million to cover three months of general-fund costs.
And in Philadelphia, officials say they are committed to stashing at least $20 million in the next fiscal year, thanks in part to a record-high $368 million budget surplus, the Journal reported. Still, officials concede they would need a $750 million surplus to hit the target of the Government Finance Officers Association, which maintains a city needs to cover two months of a city's annual general-fund budget.
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