June 4, 2025 The Newspaper Serving LGBT Los Angeles

L.A. Faces Billion-Dollar Budget Crisis: Thousands of Layoffs “Nearly Inevitable”

City Leaders Weigh Harsh Cuts as L.A. Confronts Historic Budget Shortfall

Los Angeles is facing a severe financial crisis, with its projected budget shortfall for the upcoming fiscal year approaching $1 billion, according to city officials. LA Controller Kenneth Meijia has been warning us of a severe budget shortfall since last year. On Wednesday, City Administrative Officer Matt Szabo warned the City Council that layoffs in the thousands are now “nearly inevitable” as the city struggles to address declining revenue and soaring expenses.

The budget deficit, one of the largest in recent city history, has been driven by weaker-than-expected tax revenues, escalating pension obligations, increased liability payouts, and growing personnel costs. Officials are now considering service cuts, workforce reductions, and possible deferrals of union-negotiated raises for police officers, firefighters, and other city employees.

Szabo, who oversees city finances, told the council that the city’s general fund revenues have fallen $315 million below projections, while pension costs for firefighters and police officers have surged by $100 million. Additionally, liability claims—one of the biggest drivers of the budget shortfall—have hit a record $247 million this fiscal year, while next year’s budget only allocates $87 million to cover legal settlements.

With the city’s financial situation rapidly deteriorating, Szabo did not mince words about the severity of the crisis.

“We are not looking at dozens or even hundreds of layoffs, but thousands,” Szabo said.

Despite the grim outlook, he emphasized that layoffs alone cannot close the budget gap. Instead, city leaders must consider drastic restructuring of services, potential hiring freezes, and new cost-cutting measures.

Mayor Karen Bass acknowledged the crisis and called for a complete overhaul of how Los Angeles structures its budget rather than simply making incremental cuts.

“For too long, the City’s budget and operations have simply been based on the way the City operated in the previous year,” Bass said in a letter to the Chief Administrative Officer. “This year, we must deliver fundamental change.”

Bass has directed city officials to develop proposals to slash between $500 million and $900 million in spending for the 2025-26 fiscal year, which begins July 1. She has also ordered recommendations for structural budget reforms, including:

  • Reducing liability costs associated with lawsuits
  • Reevaluating the number, structure, and responsibilities of city departments
  • Cutting departmental contract expenses
  • Finding payroll and benefit savings
  • Preserving the city’s reserve fund

City officials have warned that broader economic instability, potential federal funding shortfalls, and wildfire-related expenses will likely make balancing the budget even more difficult.

The recent wildfires in the Palisades have increased emergency response costs while also reducing property tax revenues from damaged homes and closed businesses. Meanwhile, the city’s financial outlook remains uncertain amid fluctuating federal policies, declining office occupancy rates, and post-pandemic economic shifts.

However, as the city moves into the 2025-26 budget cycle, officials are preparing for difficult and painful choices. Bass emphasized that no program or department should be considered immune from budget reductions.

“We must leave no stone unturned,” she said. “If a program or department can operate better, or if they should not operate at all, we must make those changes—now.”

With service cuts, layoffs, and restructuring now looming, the debate over how to close Los Angeles’ massive budget shortfall is only beginning. The City Council must approve the final budget for 2025-26 before July 1.

in NEWS
Related Posts

(Video) Some of the Damage Caused By Vandals at Malibu High School Overnight

June 4, 2025

June 4, 2025

40 to 50 people, who are suspected to be students or recent alumni, used eggs, flour, and markers to deface...

Biggest Night of the Year: Don’t Miss GMCLA’s ‘Dancing Queens’

June 4, 2025

June 4, 2025

Culminating its 46th season, the Gay Men’s Chorus of Los Angeles will grace the crowd with Dancing Queens, celebrating iconic...

Nick Offerman Calls Out Homophobic Video That Doctored Parks and Rec Scene

June 3, 2025

June 3, 2025

Actor Revealed Parks and Rec Cast Was Devastated by Jonathan Joss’ Murder Nick Offerman, known for his role as Ron...

Pluto TV and Oscar-Winning Director Sean Baker Team Up to Host Free Weekend Screenings

June 3, 2025

June 3, 2025

Popcorn Challenge Interactive Event Set for Westfield Century City Mall  The historic Gardena Cinema, one of the last single-screen, family-operated...

Former ‘Real Housewives’ Husband Sentenced to Over 7 Years for $15 Million Client Fraud 

June 3, 2025

June 3, 2025

Federal Judge Rejects Plea for Medical Placement, Orders Restitution and Prison Time Disgraced former attorney Tom Girardi was sentenced Tuesday...

Harvey Milk’s Name to Be Removed from Navy Ship in Pride Month Snub

June 3, 2025

June 3, 2025

Defense Secretary Pete Hegseth Orders Rare Renaming of Military Vessel In a decision that has outraged LGBTQ+ advocates and allies,...

Malibu High Targeted in Overnight Vandalism Spree; Investigation Underway

June 3, 2025

June 3, 2025

Destruction on Campus Prompts Sheriff’s Probe; Students May Face Charges Vandals caused extensive damage to the school property of Malibu...

A Season of Gratitude: After One Year in Business, Urban Jungle Continues Making its Mark

June 2, 2025

June 2, 2025

Over the last year, Urban Jungle, an indoor and tropical plants nursery, has continued its mission to cultivate a place...

The soul’s greatest hits

June 2, 2025

June 2, 2025

From ‘Ave Maria’ to ‘Hallelujah Chorus’ and ‘Ode to Joy,” a Santa Monica concert raising funds to help fire victims...

LAPD Increases Security at Jewish Sites Following Colorado Flamethrower Attack

June 2, 2025

June 2, 2025

Officials Ramp Up Patrols and Plan Emergency Response as Shavuot Concludes. Security outside Jewish institutions in Los Angeles has been...

Ariana Grande, Pedro Pascal, and Jamie Lee Curtis Rally Behind the Trevor Project

June 2, 2025

June 2, 2025

Federal Cuts Loom, Celebrities Fight to Save Lifesaving LGBTQ+ Youth Hotline More than 100 prominent figures from the entertainment industry...

The Peabody Awards Celebrate Bold Storytelling and Social Impact at Beverly Hills Gala

June 2, 2025

June 2, 2025

Honorees Including Baby Reindeer, Shōgun, and The Only Doctor at In-Person Ceremony The Peabody Awards held their awards ceremony Sunday...

Chamber Music Palisades Presents an Afternoon of Beethoven, Brahms, Debussy, and More

June 2, 2025

June 2, 2025

Brentwood Hosts Free Classical Concert with LA Philharmonic Greats Chamber Music Palisades will present a free community concert on Saturday,...

‘King of the Hill’ Star Jonathan Joss Murdered in Homophobic Hate Crime at 59

June 2, 2025

June 2, 2025

The Indigenous Actor Was Fatally Shot During a Targeted Attack in San Antonio Jonathan Joss, the LGBTQ actor best known...

Lane Closures Return to PCH in Malibu for Fire Recovery and Emergency Repairs

June 2, 2025

June 2, 2025

Traffic Will Be Impacted as Caltrans and the USACE Conduct Cleanup  The California Department of Transportation (Caltrans) has announced updated...