LOS ANGELES, CA — The county Board of Supervisors gave initial approval Tuesday to a $47.9 billion budget proposal for the 2025-26 fiscal year, with the recommended spending plan including 3% cuts to some departments and the elimination of 310 vacant positions, but no layoffs.
The recommended budget reflects efforts to “offset extraordinary budget pressures,” according to a statement from the county, including more than $1 billion in costs related to the January wildfires.
The county will also begin to feel the pain of a proposed $4 billion settlement of nearly 7,000 claims of sexual abuse against county workers, mainly at probation camps and halls.
County CEO Fesia Davenport presented the budget proposal to the Board of Supervisors Tuesday, beginning the public process of reviewing, revising and adopting the spending plan.
Presenting the budget to members of the media on Monday, Davenport said the county’s future financial picture is also threatened by the possible loss of hundreds of millions of dollars in federal funding.
“Our revenue outlook is challenging — to put it mildly,” Davenport said.
“The amount of new ongoing funding in this budget is at a five-year low.”
With the change in presidential administration, at least 13% of the county’s budget that comes through federal assistance, and billions in grants and funding, could be at risk, she said.
The state budget is also at a risk of losing federal funds, which could trickle down to impact the county.
“We are already seeing it happen,” Davenport said, noting the recent federal proposal to rescind $45 million in Public Health funds.
While reviewing the budget proposal Tuesday, Supervisors Holly Mitchell and Hilda Solis questioned portions of the spending plan, including the potential hit to county residents if there is a federal cut of Medi-Cal or other safety net programs.
“The latest figures passed in the congressional Republican reconciliation bill projects $880 billion in cuts to health programs,” Solis said.
“We’re talking about 3.4 million residents who are currently covered by Medi-Cal in our county, and we’re the largest county in the country.”
Solis also noted a potential hit to 1.6 million residents supported by CalFresh.
Davenport assured the board that county staff would return to the board with recovery plans if such cuts come to fruition.
“We would come to the board and say here is the plan for mitigation,” Davenport said.
“Once we have mitigated as much as we possibly can, if necessary, here is the plan for curtailments, reductions and layoffs.”
Davenport said if healthcare funds are affected on a larger scale, the county would potentially consider shutting down a public hospital.
“We are in uncharted territory with these simultaneous pressures on our budget,” Davenport said in a statement Monday.
“Any of these alone would be daunting, but taken together these challenges — the wildfires, the AB 218 (sex abuse) settlement, the threat of deep cuts in federal funding — are cause for great concern.”
Davenport stressed the abuse settlement is “by far the costliest in county history.”
With more than 6,800 claims, the settlements are expected to be paid through a combination of county funds, budget cuts and borrowing over a number of years, if the budget is approved by the county Board of Supervisors.
Davenport said the impact of the payments could take a hit on the county budget through 2050-51.
Supervisor Lindsey Horvath questioned whether budgets in upcoming years will see continued cuts in programs due to the settlement.
Davenport said the county was taking all steps to streamline the settlement payments, while even taking money from the county’s “rainy day” fund.
She said the county is working with consultants to find ways to continue funding various programs in upcoming budgets.
Wildfire recovery costs are also expected to impact the region over the coming years, possibly reaching as high as $250 billion.
The county expects to recover at least some of its portion of those costs from the Federal Emergency Management Agency, Davenport said.
A large part of the budget is also affected by a 41% decline in home sales driven by higher interest rates, which directly put pressure on property tax revenue, she said.
In addition to eliminating 310 vacant positions, the budget proposal also includes $50 million in cuts that will be achieved by cutting supplies, delaying equipment purchases and reducing the scope of some county programs.
Overall, the budget includes roughly $88.9 million in targeted cutbacks.
“The hope is that as we manage, very carefully, all of the pressures and we look at our revenues, and we do things like not incur new expenses — we don’t put ourselves in a position where we have to implement layoffs,” Davenport said.
County officials insisted that despite the cost-cutting, the spending proposal “is committed to sustaining the county’s essential safety net responsibilities and to funding key priorities set by the Board of Supervisors.”
Funding to homeless programs, Care First Community Investment, parks and recreation and other services would continue to remain unharmed.
Close to $12 million is allocated in the spending plan to ramp up Measure G efforts — a ballot measure passed in November 2024 to overhaul the County Charter.
The supervisors were generally supportive of the curtailments in the budget, given the various pressures on financial resources.
The board unanimously approved the proposed budget on Tuesday, advancing it to a series of public hearings that will be held in May ahead of final changes being adopted in June.
The supplemental budget is expected to be adopted in September.
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