Budget panel reviews mayor’s proposed FY25–26 plan that closes roughly $900 million gap with sweeping cuts and job eliminations

The Budget and Finance Committee spent the session reviewing the mayor’s proposed fiscal year 2025–26 budget, a plan the mayor’s deputy said “accounts for $13,950,000,000 in spending” and that the City Administrative Officer called a response to a nearly $1 billion structural gap.

Why it matters: Angelenos’ core services and city staffing are central to the debate. The proposed plan uses a mix of one‑time and structural changes—including major position reductions, higher reserves and department consolidations—to stabilize finances now while leaving contentious decisions for committee amendments and follow‑up memos.

What the plan would do: The mayor’s office presentation said the proposal counts about $650 million in pre‑position savings from swapped funding, deferred capital projects and special‑fund shifts. The CAO told the committee the final balancing step was the elimination of positions: 1,647 filled positions and 76 vacant positions, producing roughly $282 million of savings in the current package. The budget also sets aside nearly $500 million for the city’s reserve fund and $208 million in the budget stabilization fund.

Committee members repeatedly warned that the plan trades short‑term balancing for long‑term service impacts. “This is not a budget any of us would choose,” the committee chair said during opening remarks. Councilmember Bob Blumenfield called the proposals “brutal,” listing impacts he said would be felt in street resurfacing cycles, tree trimming and basic building maintenance.

Risks and outlook: The CAO presented a four‑year outlook that shows small surpluses only if current assumptions hold. He warned that a recession or further revenue shocks—citing tourism declines, tariffs and wildfire liabilities—could quickly erase that balance. A recession scenario modeled on previous downturns would produce multi‑hundred‑million dollar deficits in coming years, the CAO said.

Next steps: The committee asked for a series of focused budget memos from the CAO and departments on revenues, potential transfers to special funds, and options to avoid layoffs (for example through internal borrowing, vacancy swaps or negotiated wage deferrals). Any restoration of positions, members were told, needs structural offsets rather than one‑time fixes.

Ending: The committee set a rapid schedule for follow‑up memos and departmental hearings; members emphasized that changes at the margins will be necessary but that the council must weigh the tradeoffs between personnel reductions, service reductions and reserve targets.