City Of Los Angeles to Declare Fiscal Emergency, Lay Off 614 Employees

Los Angeles City Controller Kenneth Mejia announced Monday that the city of Los Angeles now faces 614 layoffs and is a further $30 million more in debt thanks to the recent anti-ICE protests and riots, as well as massive revenue shortfalls and large liability payouts.

According to Mejia, the largest group of proposed layoffs are from the LAPD, but will be citizens, no sworn officers. Police-civilians alone would see 248 layoffs, followed by personnel with 57, then sanitation with 44 and LAFD sworn members at 41.

“The City of LA is planning to declare a FISCAL EMERGENCY due to: Massive Liability Payouts, Spending Over Budget, and Revenue Shortfalls,” Mejia posted to X. “In order to balance the budget, 614 LAYOFFS are on the table. The City will do its best to transfer employees/fill vacant positions.”

The total number of proposed cuts can be seen below:

For the last few months, the city of Los Angeles has scrambled to solve their looming budget crisis. While many in the city were anticipating some sort of budget crunch for the 2025-2026 fiscal year, the announcement by the Los Angeles City Administrative Officer in March putting the figure at nearly $1 billion shocked many.

Reasons for such a huge gap included $61 million coming from the existing budget gap from the last fiscal year, $315 million in overall declining revenues, $100 million in increased liability claims, $275 million in reserve fund replenishment caused by emergency spending for the Palisades fire, $80 million in solid waste fee subsidies, and $250 million in scheduled pay raises for city employees.

While many cuts have already ben made, including Mayor Karen Bass taking a pay cut and City Hall employees forgoing pay raises for the next year, it still isn’t enough. In April, Bass Mayor Bass proposed huge spending rollbacks and major budgetary cuts. This included the layoffs of 1,600 employees and the elimination of 1,000 positions, with over 400 LAPD employees on the chopping block alone. Bass also began lobbying the state for a massive $2 billion relief package.

Earlier this month, Bass signed off on the new city budget, even though it left much in the air and was dependent on a floating balance to the next fiscal year to work in full.

“This budget has been delivered under extremely difficult conditions–uncertainty from Washington, the explosion of liability payments, unexpected rising costs and lower than expected revenues,” said Mayor Bass. “This budget continues to aggressively combat the homelessness crisis and invest in emergency response and vital city services like street repair, parks and libraries. I want to thank the City Council for coming together on this deal as we work together to make Los Angeles safer for all.”

However, only a few days later, the anti-ICE protests and rallies happened, costing the city even more money at the worst possible time. In total the cost of keeping the peace was $32 million, with $29.5 million going towards the LAPD. And this was on top of another $5 million loan by the city to help pay for police overtime.

“UPDATE: ICE RAIDS HAVE NOW COST LA TAXPAYERS $32 MILLION,” Mejia posted last weekend. $29.5 million or 92% relates to LAPD’s response to protests against ICE including citywide tactical alert costs. $1.4 million relates to clean-up / public property damage. Does not include potential lawsuits.”

With the city moving back into the red so soon, the 614 layoffs are now back on the table.

In order to prevent the layoffs, the city now must come up with $225 million. While the deficit was at nearly $1 billion earlier this year, the city could only do so much in terms of reducing the budget without any layoffs, resulting in that $225 million hole. Paying off that amount is a tall order, with layoffs likely being the only way forward for the city. As a result, the city will likely declare a fiscal emergency soon.

For Los Angeles, the next few years will be marred in financial uncertainty. While events like the 2026 World Cup and the 2028 Olympics are expected to bring in billions, they are also going to have a high price tag. Adding to that is that if L.A. decides to not have the games after all, the city loses $270 million right off the bat. Either way, Los Angeles is on the hook for hundreds of millions of dollars, with no real way out of the debt without drastic cuts.

The city will announce a fiscal emergency soon, as well as push forward with the 614 city employee layoffs.