Two months ago there was a warning that San Francisco was facing a $1.4 billion budget deficit. Former Mayor London Breed asked city agencies to find 10% cuts across the board.
Today we’re learning that Los Angeles is facing a similar problem. The LA Times calls it a “full-blown crisis” and reports that layoffs are inevitable.
L.A.’s financial problems exploded into a full-blown crisis on Wednesday, with the city’s top budget official announcing that next year’s shortfall is now just shy of $1 billion, making layoffs “nearly inevitable.”
City Administrative Officer Matt Szabo advised the City Council to focus on cost-cutting measures, including a potential reduction in the size of the workforce, to bring the budget into balance for 2025-26…
“The severity of the revenue decline, paired with rising costs, has created a budget gap that makes layoffs nearly inevitable,” he said. “We’re not looking at dozens or even hundreds of layoffs, but thousands.”
Mayor Karen Bass must present her strategy for closing the $1 billion gap by April 21, the legal deadline for her to release her proposed 2025-26 budget.
Mayor Bass is calling for “fundamental change” with budget cuts between $500 million and $900 million.
Los Angeles Mayor Karen Bass portrayed a dire financial situation for the city of Los Angeles in a budget preview released Wednesday that called for “leaving no stone unturned.”
Bass said her 2025-2026 budget proposal will “deliver fundamental change to the way the City operates. In a letter to Los Angeles City Administrative Office Matthew Szabo, Bass directed his office to come up with a plan to save between $500 million and $900 million in structural budgetary expenses in the 2025-26 Fiscal Year.
“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 statement. “This year, we must deliver fundamental change in the way the City operates and base our budget on how the City can best serve the people of Los Angeles and to best use their scarce budget dollars.
Los Angeles is already talking to leaders of various unions about changes to their contracts. There are going to be layoffs and big changes overall. In short, LA is going full DOGE because it has no choice.
The state of the nation is considerably worse than the state of Los Angeles. The FY 2024 budget deficit was $1.8 trillion and this year’s deficit is projected (by the CBO) to be another $1.9 trillion. And yet the approach being applied in one of America’s largest cities is considered wild-eyed extremism when applied at the federal level. If LA can respond by taking needed budget action, why can’t the Trump administration?
Maybe we should cut some budgets and lay off some people at the federal level as well. Maybe we should leave no stone unturned, as Mayor Bass said, to find ways to save money. It makes sense to me, but ask a Democrat and they’ll tell you that’s crazy talk and then they’ll wink and smile at a bit of arson and vandalism directed at Elon Musk for trying. Democrats would rather see America fail than see Republicans succeed.
