Mayor Karen Bass' proposed city budget includes over 1,600 layoffs
The 2025-26 budget for the
City of Los Angeles
closes an earlier projected $1 billion shortfall in what city leaders called a structurally balanced budget.
The $13.95 billion budget presented on Monday is on par with last year's, closing the gap partly through layoffs and department consolidations as costs increase and revenues decrease.
Since budget planning began,
layoffs have been called "inevitable" with 3,500 positions on the chopping block
. The final affected workforce number announced in Monday's proposed budget includes 1,647 filled position layoffs, and not filling 1,074 vacant positions.
Mayor Karen Bass discussed the layoffs at Monday's State of the City address, telling the city workforce, "You are the city's greatest asset … but I want to be straight with you. My proposed budget, unfortunately, includes layoffs, which is a decision of absolute last resort."
She said she is heading to Sacramento this week to advocate for more resources, in hopes to reduce the layoff impacts.
While property taxes make up 35% of the city's revenue, another chunk comes through business, sales and hotel taxes -- which have all declined. Other hits affecting the city's budget include the unknown impacts of tariffs, liability payments and the unexpected expenses associated with the Palisades Fire.
Aside from layoffs, city officials said closing the budget gap comes through reducing "ghost positions," identifying new revenue to offset costs, reducing consulting and other contractual services, deferring some capital projects and reducing funding for the
Mayor's Office.
Chief Administrative Officer Matt Szabo attributed the fiscal crisis to the tax revenue missing its projections by $315 million, firefighter and police pension payments increasing to $100 million, $80 million in solid waste fees, more than $100 million in legal payouts and the $275 million needed to replenish the city's reserve fund.
Some structural changes to offset the deficit included consolidating departments and eliminating commissions.
The departments of Aging, Economic and Workforce Development and Youth Development will be consolidated under the Community and Family Investment Department (CFID).
Eliminations include the Health Commissions, which are advisory bodies, the Innovation and Performance Commission and the Climate Emergency Mobilization Commission.
The proposed budget also maintains a 6% reserve, above the 5% city-required level.
Capital infrastructure projects, including the Convention Center, Sepulveda Basin improvements and recreation facilities in the valley and South LA, are budgeted to proceed.
During Monday's State of the City address, Mayor Bass affirmed her commitment to public safety. "I said we would work to rebuild the ranks of the LAPD to protect our communities … and I am pleased to report that we have hit a four-year high of applications to join the LAPD," Bass said.
No sworn officers or firefighters will be impacted. In fact, the Los Angeles Fire Department budget increased by 12.7%, with 227 new positions, funding for more paramedics and fast response vehicles and other resources and support. Funding will also continue for 700, 911 emergency dispatchers to lower wait times. Bass added that the Los Angeles Police Department retained 120 more officers compared to last year.
The Los Angeles City Council still has to vote to approve the budget.
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