Los Angeles should consider raising taxes on real-estate sales to deal with continuing budget deficits, the city administrative officer said.

The second-largest U.S. city by population has whittled the deficit to a projected $238 million in the current fiscal year, from $529 million in the year that ended in June 2010, Chief Administrative Officer Miguel Santana said today in a report. Further reductions aren’t likely without additional revenue because of a projected 4.2 percent annual increase in costs such as salaries, pensions, health care, and workers’ compensation, he said.

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