In LA State of the City speech, Mayor Bass says layoffs will be part of budget plan (2025)

Mayor Karen Bass announced possible layoffs Monday when she delivered her State of the City speech and a spending proposal to address a nearly $1 billion budget deficit, wildfire recovery and other challenges facing Los Angeles.

Bass outlined her priorities in the noon speech at City Hall, speaking on wildfire recovery, crime, the homelessness crisis, the budget deficit, economic development and major events coming to the city, including the 2028 Olympics.

Bass said municipal employee layoffs will be necessary to address the extraordinary budget gap. Her office later released the mayor's spending proposal, which includes 1,647 layoffs, and said the mayor will work to reduce that number.

"My proposed budget unfortunately includes layoffs, which is a decision of absolute last resort," Bass said. "So let me assure you, our hard-working public servants, that I will never stop fighting for you."

Bass' office said no sworn officers or firefighters will be impacted by layoffs. The proposal includes protection for homeless funding, no changes to library, recreation and park facility hours and support for capital infrastructure.

The budget plan consolidates four city departments -- the Departments of Aging, Economic and Workforce Development, and Youth Development -- under the Community Investment for Families Department. The Commission for Community and Family Services would be consolidated under the Community Action Agency - Community Action Board, and the Affordable Housing Commission would be consolidated under the Rent Adjustment Commission.

The proposal also eliminates the Health Commission, an advisory body, the Innovation and Performance Commission, and the Climate Emergency Mobilization Commission.

The Los Angeles City Council must consider and approve a budget by June 1.

“This budget makes investments to continue our progress on critical challenges like decreasing homelessness and crime while bringing the City’s finances into balance and driving change including common sense consolidations of related departments,” Mayor Bass said. “Homelessness is down. Crime is down. These are tough challenges, and our progress shows we can do anything in this city of limitless potential.”

The State of the City address comes after the city was warned of the $1 billion deficit as a result of overspending, liability payouts, labor contracts and lower-than-anticipated tax revenues.

In March, a top financial city adviser told elected officials that the city's grim outlook for FY 2025-26 will require tough decisions and could lead to thousands of layoffs. City Administrative Officer Matt Szabo attributed the city's condition to declining tax revenue and rising costs.

"The state of our city is this – homelessness is down, crime is down. These are tough, tough challenges, and they show that we can do so much more," Mayor Bass said. "We have a long way to go. We need a citywide turnaround. We need a fundamental overhaul of City government to deliver the clean, safe, healthy and orderly neighborhoods that Angelenos deserve in the place they call home – and to reverse decades of failure on homelessness. My pledge is to continue making change – and I ask the City Council and every Angeleno to join in turning our city around."

Bass directed the city's Chief Administrative Officer to report to her with strategies to reduce spending significantly while protecting essential services.

“This is a broken system, and to turn LA around, we have to fix this," Bass said

Bass noted said she will be at the state capitol this week with City Attorney Hydee Feldstein Soto to lobby state legislators on a potential bill intended to cap damages paid out by municipalities. Additionally, city officials are waiting on an answer from Gov. Gavin Newsom about a $2 billion funding request to help with budget strains while mitigating city worker layoffs and fire recovery costs.

January's wildfires exacerbated financial issues.

April 17 marked 100 days since the start of the LA wildfires, including the Palisades Fire, the third-most destructive wildfire on record in California. As of Wednesday, the city of Los Angeles has issued 19 rebuilding permits. Bass said permits to rebuild were issued more than twice as fast as permits in the wake of the Woolsey and Camp fires.

Bass announced a plan to establish a self-certification program aimed at reducing redundancy in the permit process. She also called on the City Council to pass an ordinance to wave plan check and permits fees.

The mayor also discussed LA's homelessness crisis following a recent developments over the Los Angeles Homeless Services Authority (LAHSA).

The county Board of Supervisors advanced a proposal to create its own department to manage regional homeless services, effectively defunding LAHSA – a joint city-county agency criticized for inefficiency, waste and lack of transparency. LAHSA officials said the agency grew rapidly in recent years and has since taken steps to address those issues.

A staggering $1 billion budget deficit projected for the City of Los Angeles took many by surprise but City Controller Kenneth Mejia says he's been sounding the alarm for the past two years. Darsha Philips reports for the NBC4 News at 11 p.m. on March 20, 2025.

The new county agency is expected to be in place by Jan. 1, with all funding pulled from LAHSA and transferred to the new department by July 1, 2026.

"We are taking action and making change, and after years of increasing homelessness, we are finally reversing that trend – homelessness is down," Bass said. "That includes a 10 percent reduction in street homelessness and a 38 percent reduction in makeshift structures and tents. We are moving thousands more people from the streets than before we took office, and more Angelenos are being moved into permanent housing than ever before. All of this comes as, nationwide, homeless went up 18 percent – but not in Los Angeles."

Meanwhile, city officials have expressed a need to hire more police officers in a bid to improve public safety and prepare for global events coming to the region. In March, Bass joined Police Chief Jim McDonnell to announce that the overall crime rate in the city declined in 2024, with homicides dropping 14% and shooting victims decreasing by 19%.

Immigration is also likely to be addressed, as the Trump administration continues its crackdown on “sanctuary cities” and threatens to pull related funding.Bass may also touch on other federal policies and their potential impact on the city's economy, travel and tourism industries.