Tags: Los Angeles budget, Karen Bass, city layoffs, LAPD, LAFD, LAHSA, city deficit, municipal budget, homelessness services
Massive Layoffs Proposed to Tackle Budget Shortfall
Los Angeles Mayor Karen Bass has introduced a proposed $13.9 billion budget for the 2025–26 fiscal year, which includes plans to lay off more than 1,600 city workers in a bid to address a nearly $1 billion deficit. The proposed spending plan represents an 8.2% increase from the previous year’s budget but includes severe cost-cutting measures, such as staff reductions and the consolidation of four city departments.
Departments Facing the Most Cuts
The hardest-hit departments include the city’s Department of Transportation, with more than 400 positions—both filled and vacant—on the chopping block. The Los Angeles Police Department is also set to lose 403 civilian roles. These proposed layoffs cover general, special, and grant-funded positions across the city.
While these job cuts are extensive, some departments are still seeing growth. The Los Angeles Fire Department is slated for a $103.7 million increase in funding and the addition of 227 new positions. The LAPD, meanwhile, would receive an additional $6.1 million for its nearly $2 billion operating budget.
Union Pushback and Public Response
David Green, president of SEIU Local 721, representing around 10,000 city employees, has voiced strong opposition to the layoffs. “This shouldn’t be the first place people go, to lay off city workers providing valuable city services,” he stated, calling for a full review of city finances.
Mayor Bass addressed the city workforce directly, expressing regret about the layoffs and describing them as a “last resort.”
Root Causes of the Budget Deficit
The city’s budget crisis has been driven by a mix of overspending, higher-than-expected liability payouts, labor contract increases, and sluggish tax revenues. Annual liability settlements, which previously averaged $100 million, soared to $300 million this year due to a backlog of lawsuits with uncapped damages. Labor costs also surged by $259 million.
On the revenue side, projections have fallen short. The city anticipated $8.14 billion in general fund revenue but now expects only $8 billion. Declines in business and sales taxes, coupled with broader economic uncertainty, have worsened the situation.
Seeking Help from the State
Mayor Bass plans to appeal to the California Legislature for additional financial support to help close the deficit. She will travel to Sacramento this week to discuss funding options with state lawmakers.
Changing the City’s Homelessness Strategy
In response to ongoing criticism of the Los Angeles Homeless Services Authority (LAHSA), the city and county are shifting away from the agency. LA County is developing a new department dedicated to regional homelessness services, which will fully replace LAHSA by July 2026. LAHSA has acknowledged issues tied to its rapid expansion and has begun reforms, but public confidence remains low.
Addressing Broader City Challenges
In her State of the City address, Mayor Bass acknowledged the city’s numerous challenges—from homelessness and housing shortages to public safety and climate-related disasters. She emphasized the need for structural reform to improve city services, describing the current system as broken.
Bass also reaffirmed the city’s commitment to immigrants, stating that Los Angeles will always support its immigrant communities—a declaration that received a standing ovation.
Despite the difficult fiscal road ahead, Bass vowed to lead a transformation that creates a city government that works better for all Angelenos.
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