Los Angeles Budget Adjustments: Navigating Fiscal Challenges in 2025-26
Los Angeles faces significant fiscal headwinds, prompting city leaders to make tough choices. As the city grapples with a near $1 billion deficit, proposed budget adjustments for fiscal year 2025-26 aim to mitigate widespread layoffs and preserve essential services. the Los Angeles City Council is actively revising Mayor Karen Bass’ initial budget proposal, focusing on strategic cuts and innovative solutions to balance the books.
Potential Reduction in Layoffs and Job preservation
The Budget and Finance Committee has been meticulously reviewing Mayor Bass’ budget,which initially proposed 1,647 layoffs and the elimination of 1,053 vacant positions. The committee’s recommendations, advanced on May 16, 2025, seek to significantly reduce the number of potential layoffs. councilwoman Katy Yaroslavsky,chair of the budget committee,emphasized that the revised proposal could “cut the number of layoffs by more than half,” potentially saving nearly 1,000 jobs and restoring vital services.
Chief Legislative Analyst Sharon Tso is optimistic about further reducing the number of layoffs. “I think we’re going to be able to truly get that number down to less than 500,” Tso stated. Efforts are underway to identify opportunities for transitioning employees to different departments, ensuring continued employment for as many city workers as possible.
Did You Know? In 2023, budget deficits led to similar restructuring efforts in Chicago, where city officials explored strategies like early retirement packages and departmental consolidations to minimize layoffs. These actions highlight a common challenge for major cities facing economic downturns.
Strategic Adjustments to the Los Angeles Police Department (LAPD) Budget
One of the key adjustments involves a reduction in sworn hiring within the LAPD. The proposal suggests reducing the number of recruits from 480 (12 classes of 40) to 240 (six classes of 40), resulting in a savings of $13.31 million. While this represents a slowdown in hiring, city officials also plan to restore 133 LAPD civilian positions out of the 403 initially slated for elimination. These civilian roles, including photographers, criminalists, and forensic print specialists, are considered essential for investigations and cannot be easily replaced by sworn officers.
Mayor Bass acknowledged the proposed changes to LAPD hiring but reiterated her commitment to increasing the overall number of officers. “I remain consistent in wanting to increase the numbers of officers that we have hired,” she stated. She highlighted that the primary challenge lies in reforming the city’s hiring process rather than recruiting candidates.
Pro Tip: Cities can optimize public safety budgets by investing in technology and data analytics to improve resource allocation and crime prevention. As an example, predictive policing models can help deploy officers more effectively, reducing the need for extensive hiring while enhancing community safety.
Reassessing Homelessness Initiatives and Fire Department Funding
The budget committee opted not to proceed with the mayor’s plan for a new homelessness unit within the Los Angeles Fire Department (LAFD), declining to allocate an additional $36.53 million. Despite this decision,the LAFD is set to receive a $46.7 million increase in its operational budget compared to the 2024-25 fiscal year. Additionally, the department will receive $29.1 million in funding from MICLA (municipal improvement corporation of Los Angeles) for fire trucks and other vehicles, bringing the total increase to $75.8 million.
This adjustment reflects a strategic reallocation of resources, prioritizing essential equipment and operational needs within the fire department while reassessing the approach to addressing homelessness.
Restoring Critical Services and Key Positions
The revised budget proposal includes the restoration of funding and position authority for numerous departments, ensuring the continuation of essential city services. Key highlights include:
- Facts Technology Agency: Restoring 22 positions.
- Department of General Services: Restoring 77 positions for building maintenance, custodial services, fleet services, and building decarbonization.
- Department of City Planning: Restoring 108 positions.
- bureau of Sanitation: Restoring 63 positions and funding for five days of CARE/CARE+ services in all Council Districts, plus an additional 43 positions to address illegal dumping.
- Bureau of Engineering: Restoring 67 positions.
- Department of Transportation: Restoring 122 positions, including 75 traffic officers.
- Department of Recreation and Parks: Restoring 130 positions.
- Department of Animal Services: A transfer of $5 million from the unappropriated balance fund to restore funding for 62 positions and maintain current service levels across all six city-operated animal shelters.
These restorations aim to mitigate the impact of budget cuts on vital services,ensuring that Los Angeles residents continue to receive the support they need.
Mayor Bass’ Strategy: Transfers to Proprietary Departments
mayor Bass is pursuing a strategy to reduce layoffs by transferring city workers to proprietary departments such as airports, the harbor, and potentially the Department of Water and Power (DWP).These departments are not funded through the General Fund, making them viable options for absorbing employees affected by budget cuts.
“When I presented the budget on April 21, I was required to present it on that day, by the City Charter,” Bass explained.”As I said at the time, that was where we were at that moment, but that I was going to be working day in and day out to prevent the need to lay off anybody.”
This approach aims to leverage the resources of self-funded departments to provide job security for city workers and maintain essential service levels.
Labor Negotiations and Salary Adjustments
City officials have been in discussions with the city’s unionized workforce to explore options for mitigating the budget deficit. While postponing scheduled salary increases was considered, Mayor Bass clarified that concessions have not been discussed at this point. Though, she has committed to reducing her own salary and foregoing any future raises.
Additionally, her office staff members will not be taking their regularly scheduled cost-of-living adjustments in June (4%), December 2025 (2%), and June 2026 (4%). These measures demonstrate a commitment to shared sacrifice and fiscal responsibility.
State Aid and FEMA Reimbursements
Mayor Bass and City Council members have been actively lobbying gov. Gavin Newsom and state legislators for a relief package to address the deficit and assist with fire recovery efforts. However, with California facing its own $12 billion deficit, the prospects for significant state aid appear limited. The city has revised its request to focus on resources that are FEMA-reimbursable, specifically addressing the impact of fires on the General Fund.
According to the mayor, the state remains open to providing some assistance. “We are still waiting for FEMA reimbursement for COVID. So we have and are spending a tremendous amount of the city general fund on fire-related expenses and Palisades (fire recovery),” Bass said. She emphasized that receiving FEMA reimbursements in advance would provide significant relief to the city’s General Fund.
Did You know? FEMA reimbursements can be a critical source of funding for cities recovering from disasters. However, the reimbursement process can be lengthy, sometimes taking years to fully materialize. This delay can strain city budgets and hinder recovery efforts.
Summary of Key Budget Adjustments
| area | Original Proposal | revised Proposal | Impact |
|---|---|---|---|
| Layoffs | 1,647 | less than 500 (projected) | Significant reduction in job losses |
| LAPD Hiring | 480 Recruits (12 classes) | 240 Recruits (6 classes) | $13.31 Million Savings, 133 civilian positions restored |
| LAFD Homelessness Unit | $36.53 million Allocation | Not Approved | reallocation of resources |
| LAFD Operational Budget | N/A | $46.7 Million Increase | Enhanced operational capabilities |
| MICLA Funding for LAFD | N/A | $29.1 Million | Improved equipment and vehicle upgrades |
| Department of Animal Services | Potential Cuts | $5 Million Transfer | Maintained service levels and restored 62 positions |
The Los Angeles budget adjustments for 2025-26 reflect a concerted effort to navigate fiscal challenges while preserving essential services and minimizing job losses. By strategically reallocating resources, exploring alternative funding sources, and engaging in collaborative negotiations, city leaders aim to steer los Angeles towards a more stable and enduring financial future. The final decisions on these adjustments, expected on May 22, will shape the city’s priorities and resource allocation for the coming fiscal year.
Reader Question
How do you think these budget adjustments will impact your neighborhood and the city services you rely on most?
