The Los Angeles City Council unanimously declared a fiscal emergency Tuesday, authorizing the layoff of 614 city employees as the nation's second-largest city grapples with a roughly $1 billion budget deficit that has strained municipal services and forced painful cuts across departments.
The 14-0 vote, with Councilwoman Monica Rodriguez absent, represents a legal requirement that clears the way for the city to implement layoffs in the fiscal year beginning July 1. The resolution now awaits approval from Mayor Karen Bass, who has championed efforts to minimize job losses while balancing the books.
The fiscal emergency declaration allows the city to move forward with cost-saving measures beyond the planned layoffs, including reducing $4.2 million allocated to the Public Matching Campaign Trust Fund12. Council members offered no public comments before casting their votes, underscoring the somber nature of the decision.
The layoffs come as part of an approximately $14 billion budget for fiscal year 2025-26, which is larger than the previous year's $12.9 billion spending plan despite the cuts12. City officials are exploring transferring some affected workers to the Port of Los Angeles, Los Angeles World Airports, and the Department of Water and Power, which operate independently of the General Fund12.
The budget crisis stems from what city officials describe as a perfect storm of financial pressures. Overspending, new labor contracts, and rising liability costs connected to Los Angeles Police Department settlements have forced the city to tap into reserve funds12. January's wildfires further damaged the city's financial position by reducing business and property taxes, while tourism declines have cut hotel tax revenue12.
City Controller Kenneth Mejia announced the impending fiscal emergency on social media Monday night, citing "massive liability payouts, spending over budget and revenue shortfalls"13. Recent immigration enforcement protests cost taxpayers over $30 million, according to KOST 103.5, adding to the financial strain3.
The current layoff figure represents a dramatic reduction from Mayor Bass's original April proposal of 1,647 job cuts12. Through months of budget negotiations, the City Council reduced the number by slowing police hiring and scaling back other city programs, according to CBS Los Angeles1.
Labor union leaders have criticized the cuts, with David Green of Service Employees International Union Local 721 warning that layoffs would affect frontline workers serving the community daily2. The budget pressures come as Los Angeles prepares to host the World Cup and Olympics in the coming years.
