DEFICITS LIKELY FOR NEXT 5 YEARS.

Byline: Harrison Sheppard Staff Writer

The city of Los Angeles is facing a budget shortfall of $50 million in the current year, and is likely to face budget deficits for the next five years regardless of the state's fiscal condition, the city's top financial officer said Friday.

City Administrative Officer Bill Fujioka, in his first status report on the current fiscal year, recommended that the city continue the current hiring freeze this year and implement tighter clampdowns on spending policies.

For example, he said, when the City Council and mayor create new programs or positions, they should come up with ways to fund them at the same time they are approved. City leaders should also use one-time sources of revenue only for one-time expenditures, he said.

Fujioka said much of the shortfall is generated by a $47 million drop in revenue from the state from vehicle license fees. The current fiscal year began July 1.

He anticipates that the problems will continue in future budgets.

``Setting aside the state's potential impact on the city, the city itself faces a projected pattern of expenditure growth that outpaces revenue growth over the next five years,'' Fujioka wrote.

The situation could become more severe if the state's problems worsen, he said, noting there have been lawsuits filed challenging the state's decision to issue bonds to cover its shortfall this year.

Julie Wong, spokeswoman for Mayor James Hahn, said regardless of the projections, the mayor would like to increase the size of the city's police force this year. The city recently received federal grants to hire more officers and is looking for the matching funds to implement the grants, she said.

``We're reviewing (the reports) now and we agree it's going to be a challenging budget year,'' Wong said. ``But the mayor's priority remains public safety. He's going to continue to look for money to hire additional police.''

Hahn's push for more police in the current year's budget sparked an intense standoff with the City Council over the summer. The council argued that the city could not afford to expand the Police Department at a time when the state's budget problems threatened to reduce the city's revenue. The council eventually won the battle, overriding Hahn's budget veto, but said the issue could be reconsidered later in the fiscal year.

Harrison Sheppard, [phone]

harrison.sheppard(at)dailynews.com