L.A. Faces ‘Inevitable’ Layoffs of Thousands of City Employees Due $1 Billion DeficitThe City of Los Angeles is bracing for layoffs of thousands of municipal employees due to a budget crisis that is said to be “inevitable,” as the city is reeling from recent wildfires and still preparing to host the 2028 Summer Olympics.
The Los Angeles Times reported:
L.A.’s financial problems exploded into a full-blown crisis on Wednesday, with the city’s top budget official announcing that next year’s shortfall is now just shy of $1 billion, making layoffs “nearly inevitable.”
City Administrative Officer Matt Szabo advised the City Council to focus on cost-cutting measures, including a potential reduction in the size of the workforce, to bring the budget into balance for 2025-26.
Szabo, in his presentation to the council Wednesday, attributed the city’s financial woes, in part, to increased spending on legal payouts, which have ballooned over the past few years. Tax revenues have been coming in much weaker than expected — and are expected to soften further in the upcoming budget year, which starts July 1.
Mayor Karen Bass put a positive spin on the shortfall, issuing a press statement hailing the opportunity to make “fundamental change in the way the City operates” and promising to “reduce spending significantly while protecting essential services.” Bass blamed the Palisades Fire, which not only required more emergency spending, but also reduced the city’s property tax base. She called for “sweeping structural reform of the City’s budget and operations.”
She wrote a letter to Szabo, telling him to produce a budget that would save between $500 million and $900 million.
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