Budget Committee reviews mayor's $13.95 billion FY 2526 plan that eliminates 1,647 filled positions to close roughly $900 million gap

The Los Angeles Budget and Finance Committee spent the third day of hearings on the mayor's proposed Fiscal Year 2526 budget, a $13.95 billion spending plan that city officials say closes roughly a $900 million shortfall by eliminating hundreds of positions, shifting costs to special funds and increasing reserves.

The plan, presented to the committee by Matt Hale, deputy mayor for finance, operations and innovation, and reviewed in detail by City Administrative Officer Matt Szabo, would reduce the city's regular workforce and consolidate several departments and commissions while setting aside nearly $500 million in reserves and other one-time buffers. "The budget proposes the elimination of a number of positions," Hale said during the presentation.

Why it matters: The package is aimed at returning the city to structural balance but would shrink the workforce, slow some services and reorganize departments. Committee members repeatedly said they want alternatives that avoid layoffs, asked for memos quantifying trade-offs and warned that a recession or rising tariffs could undo projected savings and increase borrowing costs after a recent ratings action.

Key facts and proposals

- Size and shortfall: The mayor's proposed budget totals $13,950,000,000 and projects general-fund growth of about 0.36 percent; officials said closing the gap required "extremely significant and impactful decisions." Szabo told the committee the gap to close exceeded $900 million.

- Positions and savings: The proposal identifies elimination of 1,647 filled positions and 1,076 vacant positions. City staff estimated the eliminations generate roughly $282 million in near-term savings (about $151 million from filled positions and $131 million from vacant positions) and a full-year payroll reduction value of about $225 million for the filled positions if sustained.

- Reserves and one-time accounting: The proposed budget directs a large one-time appropriation to restore reserves: roughly $484 million (about 6.01 percent of general-fund revenue) in the reserve fund, about $208 million in the budget-stabilization fund and a $30 million unappropriated-balance reserve for midyear adjustments. The CAO said the plan also sets aside $200 million for liability…