City of South Gate

Michael McGrath
South Gate, a community in Los Angeles County, has a structural deficit that local leaders and managers have been unable to eliminate despite years of austerity and cost cutting. South Gate entered the 2008 recession weakened financially and organizationally by the earlier crisis. Local leaders have struggled to overcome the city’s difficult recent history and its tough fiscal and economic challenges, but it would be something of an exaggeration to suggest that they have made significant inroads in adopting the strategic and organizational changes needed to achieve an ethos of fiscal sustainability. The general approach to budgeting and fiscal issues is the conventional one of cost cutting, modest tax increases, and hopes for commercial development. The city has failed to build up an adequate financial budget with a structural deficit on a year-to-year basis. The city, furthermore, is facing a serious problem of underfunded infrastructure. Still, local officials have acted responsibly to address financial challenges as they have arisen. Considering what was going on in the period between 2000 and 2003, the city has made obvious progress. If the shopping district and other economic development projects succeed, South Gate will be in even better shape, though the city will continue to face deficits and cutbacks unless and until the new revenue comes in, which won’t be until late 2013 at the earliest. “We have a bright future ahead of us barring a double-dip recession,” said one public manager. “The things outside of our control are going to hurt us. The things within our control, we’ve done a good job of managing. We’re crossing our fingers, even if we have a slow growth economy for the next couple of years, we will be okay if we don’t hit another recession.”

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