The Los Angeles City Council has approved a plan to address a $263 million budget deficit. The deficit appeared three months into the 2025–26 fiscal year. City officials say the shortfall is due to unexpected spending in several departments. The council has authorized $14.19 million for urgent needs. This includes $1.36 million for outside legal counsel and nearly $6 million for fire debris cleanup and stormwater repairs. Officials also outlined $169.41 million in possible budget actions. The goal is to reduce the overspending to $80 million by the end of the fiscal year.
City revenues are higher than expected. Collections are $80 million above projections. Increased taxes from sales, properties, businesses, utilities, and real estate have contributed to this. However, hotel tax revenue is $3.3 million below target. This is mainly due to less tourism from China and Canada. There are also concerns that property tax collections could change because of the recent Palisades Fire.
City Administrative Officer Matt Szabo said Los Angeles is in a better financial position than last year. He advised departments not to request more budget increases or loans. His office is reviewing 29 pending requests totaling $130.4 million. The largest spending increases are from the Los Angeles Fire Department ($87.6 million), the City Attorney’s Office ($34.2 million), and the Los Angeles Police Department (LAPD) ($27.7 million). Trash collection services need an extra $30.09 million due to delays in rate adjustments…