Los Angeles County officials told the Board of Supervisors on July 29 that the county is facing a cluster of fiscal shocks — federal spending cuts, a multibillion-dollar state settlement and wildfire recovery costs — that together could force service reductions, layoffs and facility closures if not urgently managed.

The county’s chief executive officer described the incoming federal package as “a tidal wave of profound impacts” and said the county currently estimates more than $1.5 billion in impacts from the suite of federal actions, including roughly $714 million tied to the recently passed “big bill.” The CEO added county staff are also tracking an additional roughly $800 million in possible federal cuts as appropriations bills are finalized.

The CEO said the county has kept a balanced budget so far after measures the board previously approved, but those actions are unlikely to be sufficient as multiple losses arrive at once. “Our very ability to continue to maintain essential services, and preserve the safety net is frankly in danger,” the CEO said.

Why it matters: County leaders warned the combined effect of federal cuts, a $4 billion settlement the county has already budgeted under AB 218 and at least $800 million in initial wildfire-related costs creates hard tradeoffs for public health, social services, parks and other programs that serve vulnerable residents.

What was described
- Federal cuts: County staff identified $714 million in direct impacts from the recent federal package and said another $800 million is anticipated from other pending federal actions. The CEO and department leaders said the cuts will reduce Medicaid funding and nutrition assistance that many residents rely on.
- AB 218 settlement: The county has budgeted $4 billion for the largest settlement in the county’s history; the CEO said more than 2,500 additional claims remain pending and could add further pressure.
- Wildfires and recovery: Initial county estimates place near-term wildfire costs at $800 million with potential to grow to $2 billion when lost revenue and deferred permit fees are included.
- Labor and benefits: The county reported tentative labor agreements that include one‑time payments and multi‑year cost-of-living increases that together will add hundreds of millions annually; staff said pay and benefit increases already negotiated add pressure to the structural budget.

Operational impacts described by county staff included a range of curtailments that have been implemented or are planned: parks and lakes closing two days a week; shortened swim seasons and Parks After Dark cancellations; reduced staffing for animal control resulting in slower adoption timelines and enforcement; closure of two probation offices; and cutbacks to youth employment programs and public health staffing for disease control.

Health and human services officials warned of downstream effects if federal Medicaid funding is reduced. Doctor Christina Contreras, representing public health, said the federal changes will add documentation and work requirements for beneficiaries and could remove eligibility for people if they do not reconfirm coverage. She said the county estimates about 2.2 million adults are in the affected age range and that staff are working with managed care providers to reduce drop‑offs.

Department leaders said some front‑line changes are already under way. Department of Health Services leaders told the board they are implementing efficiency measures to stretch reserves, and warned that the largest federal Medicaid reductions are backloaded into fiscal years 2027–28 and 2028–29, giving months to pursue mitigation but also forewarning potential layoffs and even hospital closures if revenue losses are not addressed.

Board direction and next steps
The board approved a motion to schedule a weekly budget update from the CEO at 9:45 a.m. to keep elected officials and the public informed. County staff said those briefings will take a single pressure per week and provide deeper analysis and mitigation strategies. Departments were asked to prepare curtailment plans at 3%, 5% and 8% levels and to work on workforce reduction planning where necessary.

Quotes
- “We are currently estimating more than $1,500,000,000 in impacts from the so‑called big bill and related cuts,” the CEO told supervisors.
- “These cuts will have a profound impact on county departments and services moving forward,” the CEO said, warning “program reductions and closures are likely as well as facility closures and, yes, layoffs.”
- Doctor Christina Contreras, public health, said: “For our CalFresh admin costs the federal government has reduced their contribution from 50% to 25%. For LA County that’s a hit of $200,000,000.”

Community response and context
Public commenters — including home care workers and labor representatives who spoke during general comment — warned supervisors that any cuts will disproportionately affect low‑income residents and the caregivers who provide essential services. Labor leaders urged the board to prioritize staff and home care contracts while supervising budget tradeoffs.

Lede follow‑up (what’s next)
County staff said they will publish weekly briefing materials for the board and the public; departments will return with targeted analyses of specific pressures — e.g., federal Medicaid changes, AB 218 claim trajectories and wildfire recovery costs — and with workforce reduction plans for consideration during supplemental budget hearings.

Ending
Supervisors pressed county staff for clearer timelines and for more accessible public briefings. Officials asked members of the public to track weekly updates and department curtailment proposals as staff work to translate the federal and state policy changes into local budget actions.