Natural stimuli are highly redundant, possessing significant spatial and temporal correlations. While sparse coding has been proposed as an efficient strategy employed by neural systems to encode sensory stimuli, the underlying mechanisms are still not well understood. Most previous approaches model the neural dynamics by the sparse representation dictionary itself and compute the representation coefficients offline. In reality, faced with the challenge of constantly changing stimuli, neurons must compute the sparse representations dynamically in an online fashion. Here, we describe a leaky linearized Bregman iteration (LLBI) algorithm which computes the time varying sparse representations using a biologically motivated network of leaky rectifying neurons. Compared to previous attempt of dynamic sparse coding, LLBI exploits the temporal correlation of stimuli and demonstrate better performance both in representation error and the smoothness of temporal evolution of sparse coefficients.