Los Angeles is about to enter a period of austerity not seen in a number of years.
On Wednesday, leaders received a grim update on the city’s financial outlook from City Administrative Officer Matt Szabo. He told the council that Los Angeles faces a shortfall of nearly $1 billion next year.
Some of the main culprits are costly legal settlements and weak revenues. Recent wildfire disasters have made the situation worse.
“The severity of the revenue decline, paired with rising costs, has created a budget gap that makes layoffs nearly inevitable,” Szabo remarked. “We’re not looking at dozens or even hundreds of layoffs, but thousands.”
The news clearly shocked some members of the council. It also jolted Mayor Karen Bass. She said the city could “leave no stone unturned” in its effort to cut costs. In a statement, Bass vowed the next budget would bring “fundamental change” to the city.
Councilmember Katy Yaroslavsky indicated that city workers could be asked to defer scheduled raises.
“Eighty percent of our expenses is labor,” Bob Blumenfield said.
David Green, who heads Service Employees International Union Local 721, expressed frustration. Before there is any talk of layoffs or deferments, he’d like to see the city cut private contracts.
Residents will feel the pain, and not just from reduced services. Szabo said the city will likely consider a hike on trash fees to boost revenue.