LA committee orders CAO follow‑up after CAO warns HR 1 could trim federal grants and tax credits

The Civil Rights, Equity, Immigration, Aging and Disability Committee voted July 20 to ask the city administrative officer for a 60‑day follow‑up report on how HR 1 could affect City of Los Angeles projects, programs and services.

The CAO’s presentation described HR 1 — called in the report “the 1 big beautiful act” or OVA and enacted July 4, 2025 — as a package of federal changes that increases defense and border spending, tightens some tax credits and reduces certain social‑safety net and clean‑energy supports. "The legislation extends and modifies key provisions of the Tax Cuts and Jobs Act of 2017, made significant changes to tax policy, increased defense and border security funding, and reduced social or health care programs such as Medicaid and SNAP," the CAO presentation said.

CAO staff told the committee the bill also phases out or eliminates some clean‑energy tax credits and rescinds or reduces funding tied to prior infrastructure laws. The CAO said proprietary departments have reported affected grants and are pursuing appeals and alternatives; the presentation noted specific impacts to energy and port projects and said departments had filed appeals with federal agencies.

Council members pressed the CAO for detail on which programs and dollar amounts are at risk. The CAO named cancelled and appealed awards (for example, a grid‑infrastructure grant to LADWP and a statewide coordinated project in which LADWP and the Port were sub‑recipients) but said some figures in the verbal presentation were not broken down in department budget requests and that county‑administered benefits (Medi‑Cal, CalFresh) are being monitored by Los Angeles County.

The committee’s motion — introduced by a council member in the meeting record as "Councilman Grama" and carried by the chair — directs the CAO to issue an updated report within 60 days with findings on HR‑1 impacts, including funding reductions and changes in eligibility for Medi‑Cal/CalFresh; it also requests that the Department of Water and Power and the Port of Los Angeles report to the Energy and Environment Committee within 60 days on contingency planning and alternative funding sources. The motion passed on a roll call recorded as four ayes and was adopted as amended.

Why it matters: Council members and community advocates warned that changes to federal funding and work‑requirement provisions could increase hardship for vulnerable Angelenos and increase demand on city services. The CAO offered to return with more granular accounting and said the mayor’s office is coordinating with county agencies to inform residents.

What’s next: The CAO must provide the requested follow‑up report within 60 days, and the DWP and Port must report to the Energy and Environment Committee within the same period, per the committee’s instructions.