Introduction to the Budget Crisis
Los Angeles Mayor Karen Bass delivered the bad news last week to a room full of activists in South Los Angeles: With the city in financial trouble, jobs were on the chopping block. Yet the way Bass framed the situation, it was hard to tell how bad the news really was.
The Proposed Budget
The mayor released her proposed spending plan for 2025-26 three days later, and the outlook was indeed dire — perhaps the toughest city budget in 15 years. Her budget advisers produced a list of nearly 1,650 positions targeted for layoffs, plus nearly 1,100 vacant posts that would be eliminated.
Mixed Messages from City Hall
On paper, the mayor has called for reductions to a wide array of agencies, including transportation, planning and street services. In person, however, Bass has sounded far more hesitant. Bass, both before and after releasing her budget, said she is hoping that financial aid from Gov. Gavin Newsom and the state Legislature will help her close the budget gap and avoid layoffs.
Concerns from City Council Members
City Councilmember Monica Rodriguez said she, too, was in Sacramento this week, but heard little enthusiasm for an L.A. rescue package. She voiced concern about the heavy emphasis on state aid at City Hall, saying the city’s workforce is getting an unrealistic view of the unfolding budget crisis. “It’s providing false promises and false hope on all fronts,” she said. “We have to be honest about what we’re confronting.”
Labor Negotiations
The city’s labor negotiators have already begun meeting with union leaders to ask them to postpone this year’s pay raises, which are expected to add $250 million to the upcoming budget. As long as the focus is on financial assistance from the state, those unions will have little incentive to make the types of concessions that could bring the budget into balance, Rodriguez said.
Historical Context
In some ways, the mayor’s budget strategy resembles the one carried out 15 years ago by then-Mayor Antonio Villaraigosa. During that financial crisis, Villaraigosa initially called for thousands of layoffs, in an effort to pressure public employee unions to return to the bargaining table.
The Mayor’s Approach
Bass, by comparison, has been working much more closely with the city’s labor unions. In an interview, she touted that collaborative approach — and pushed back against the idea that she is offering them false hope. “I wouldn’t be up in Sacramento … if I did not believe there was a possibility that we could get support,” she said.
State of Play
— BUDGET BLOWBACK: There were plenty of repercussions from the release of Bass’ budget proposal. Some voiced alarm over planned layoffs at the Department of Transportation. Others worried about street trees. Still others were focused on the Police Department, whose leaders warned that layoffs of civilian employees would result in the closure of three jails. Only the Fire Department received the go-ahead to make a significant number of hires — more than 200, per the mayor’s spending plan.
— A FULL PLATE: For L.A.’s mayor, the problems have been piling up. She is contending not only with a homelessness crisis, post-wildfire rebuilding and a budget meltdown, but also shrinking film and television production, a downturn in housing construction and a potential downturn in trade and tourism. Bass acknowledged the various challenges but told The Times they are not insurmountable.
— PERMIT PLUNGE: Speaking of housing, L.A. approved permits for 1,325 homes during the first quarter of 2025, a decrease of nearly 57% compared to the same period a year earlier. Those paltry figures — driven by a variety of causes — were only the latest batch of bad news about the city’s housing affordability crisis.
Quick Hits
- Where is Inside Safe? The mayor’s signature program to combat homelessness went to two neighborhoods this week: Valley Boulevard in El Sereno, represented by Councilmember Ysabel Jurado, and the area around Paxton Park in Pacoima, represented by Councilmember Monica Rodriguez.
- On the docket for next week: The City Council’s budget committee takes up the mayor’s 2025-26 spending all of next week, with labor leaders appearing on Monday, public safety agencies speaking on Wednesday and the homelessness budget discussed on Thursday.
Conclusion
The city’s financial situation is dire, with a budget gap of nearly $1 billion and potential layoffs of over 1,600 city employees. While the mayor is hopeful that state aid will help close the gap, city council members and labor leaders are skeptical. The city’s labor negotiators are working to postpone pay raises and find other solutions to the budget crisis.
FAQs
Q: How many city employees are at risk of being laid off?
A: Nearly 1,650 city employees are targeted for layoffs, plus nearly 1,100 vacant posts that would be eliminated.
Q: What is the city’s budget gap?
A: The city’s budget gap is nearly $1 billion.
Q: Is the mayor seeking state aid to help close the budget gap?
A: Yes, the mayor is seeking financial aid from Gov. Gavin Newsom and the state Legislature to help close the budget gap and avoid layoffs.
Q: How much would the city need to prevent layoffs?
A: The city needs $282 million to prevent the elimination of more than 2,700 city positions, and just $150 million to stave off the 1,650 layoffs.
