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The Los Angeles City Council approved a resolution Tuesday declaring a financial emergency in response to a decline in revenue and rising debt.
By 14-0 votes, council members approved the resolution. This is subject to approval from Mayor Karen Bass. The declaration allows the city to address a deficit of approximately $1 billion in order to advance actions for the fiscal year 2025/26. This includes plans to fire around 614 city employees and cut the allocation of around $4.2 million to public matching campaign trust funds, particularly public matching campaigns.
Councillor Monica Rodriguez was absent during the vote.
Council members did not comment on the issue prior to vote.
Amidst the economic challenges, the city council and BASS have approved a budget of around $14 billion, which begins on July 1st. This will start on July 1st. The spending plan included cost-cutting measures to reduce spending in some regions and address the $1 billion deficit, but exceeded the $12.9 billion budget for fiscal year 2024-25.
The budget requires over 600 layoffs. Elected officials will also include the port of Los Angeles, the World Airport of Los Angeles, and
Water and Power Bureau. These three unique divisions are not affected by changes to the general fund as they operate through revenue from their respective services.
The deficit was partly caused by increased liability costs, among other issues, including complaints filed with the Los Angeles Police Department. These settlements encouraged elected officials to immerse themselves in the reserve fund, the account for rainy days for emergencies.
The January wildfires worsened the city’s financial condition, further reducing business and property taxes. Travel and sightseeing were also a hit, with income being collected from hotel taxes.
Council president Marquez Harris Dawson’s office president did not immediately answer an investigation into the resolution, as well as questions regarding the proposal to transfer workers.
On Monday night, LA City Controller Kenneth Mejia shared a social media post, pointing to the city’s declaration of a financial emergency as a result of spending on massive liability payments, budget and revenue shortages. To balance the budget, according to his post, there are 614 layoffs on the table.
Of those figures, approximately 248 LAPD private employees are expected to lose their jobs, with 57 workers in the HR department, 44 sanitation workers, 41 fire station workers and 34 workers from information
Technology, 33 general service workers, 29 transportation workers, and more.
Representatives from Mejia’s office did not respond to emails regarding additional comments on the issue.
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