Bleak financial picture for city

Faced with a possible recession and loss of a telephone users tax, Los Angeles leaders have begun planning for the worst-case economic scenario for the city - a half-billion-dollar budget shortfall next year. Kerry Cavanaugh in the Daily News.

Already the city is bracing for some immediate cuts to close a $75 million budget gap by June 30, which likely will mean reducing services and postponing new projects.

But looking to the 2008-09 fiscal year that starts July 1, Chief Administrative Officer Karen Sisson said last week that she anticipates the city could be short as much as $300 million.

If a telephone users tax on the Feb. 5 ballot fails to gain voter support, that figure could climb beyond $500 million.