Amid a reduction in federal spending, ongoing legal settlements and liabilities, Los Angeles County officials Monday unveiled a proposed $48.8 billion budget for fiscal year 2026-27, which represents a 7% decrease compared to the current spending plan.
While county officials anticipate a reduction in spending, they said they expect no layoffs, though they have planned to eliminate 81 vacant positions — a decision based on operational changes. The county expects to maintain a labor force of 115,885 positions.
Spending reductions come as a result of eliminating funding that was provided for one time-uses.
The county must also address a combined $4.8 billion in legal payouts related to more than 11,000 childhood sexual assault cases, with more claims being filed — roughly 150 per month, officials said.
“LA County is currently in the eye of a hurricane,” Acting Chief Executive Officer Joseph Nicchitta said in a statement. “Previous cuts of 8.5% and a hiring freeze helped balance our spending plan, but we’re preparing for major new budget impacts to our health and social services departments in 2027. We are doing all we can to prepare for the next phase of the storm.”
The proposed budget is expected to be presented to the county Board of Supervisors on Tuesday. Public hearings on the budget will begin in May.
Officials say the proposed budget “reflects a strategic belt-tightening approach while preserving critical safety programs.” Of the $48.8 billion, approximately $35.8 billion — or 73% — is for program-specific revenues and fixed costs. About $63.2 million is flexible for ongoing programs.
Nicchitta’s office forecasted a 3.9% increase to the 2026 tax assessment roll, for $314.8 million in increase in property tax revenue, and a $19.3 million increase in Prop 172 and local sales tax revenues.
About $17.4 million will go back into operating budgets, and the proposal recommended use of part of the $314.8 million for the following initiatives:
— A $186.4 million net increase for salaries and employee benefits, including a 2% increase for cost of living adjustment;
— About $51.2 million for assistance case-load changes for the Department of Children and Family Services, and a 4% increase in the county’s share of cost for the In-Home Supportive Services program, as required by the state;
— About $12 million to hire staff in the Departments of Alternate Public Defender and Public Defender to address workload issues; and
— Some $9.9 million and 44 positions in the Office of Emergency Management as part of a multi-year plan to improve operations.
Due to changes in federal funding, the county Department of Health Services estimates a reduction in support of about $662.2 million. For now, the department is expected to dip into its reserves to cover the shortfall.
Meanwhile, the proposed budget would allocate $40.1 million to the Department of Public Social Services. These dollars would protect more than 1,000 positions and preserve $194 million in funding for CalFresh, officials said.
The county is also setting aside $300 million in one-time funding as part of a payment toward the $4.8 billion in sexual assault settlements.
County officials face an additional 6,000 new unsettled claims, many of which they say are being driven by aggressive advertising by out-of-state lawyers. The Board of Supervisors previously called for reforming AB 218 — a state law allowing claims for decades-old sexual assault cases — with anti-fraud and anti-client harvesting guardrails.
On fire recovery, the county created two infrastructure financing districts that are expected to leverage new property tax growth support to recovery in Altadena, and unincorporated Santa Monica Mountains and Sunset Mesa.
The budget also includes $554 million in one-time funding. These are dollars rolled over from past years that are expected not to be spent by fiscal year’s end on June 30. That money can be spent on capital projects, and is the source of the $300 million set aside for AB 218 settlements.
Officials expect some new federal, state and special district funding. These dollars will provide about $82.5 million for energy programs, $25.2 million for fire department operations and $17.8 million for cash assistance programs for immigrants.
About $1.08 billion in Measure A funding will support the county’s Department of Homeless Services and Housing.
“Given the scarcity of new discretionary local funding, this year’s budget reflects more than $2.1 billion in unmet needs for county departments,” according to a report from the county.
The Chief Executive Office will be working with the Board of Supervisors and department heads to identify long-term solutions — such as potential fee hikes, cutting costs and reallocating resources to ensure long-term financial stability for the county.