City could eliminate 2K vacant jobs to close budget gap

Administrator Matthew Szabo: Deep cuts could be in Council's future

A Los Angeles City Council committee advanced a series of recommendations Thursday to address an estimated $288.6 million budget deficit, including the potential elimination of 2,000 vacant city positions.

The five-member Budget, Finance and Innovation Committee voted 3-0 to support cost-saving measures to balance the budget after hearing City Administrative Officer Matthew Szabo discuss the Third (Mid-Year) Financial Status Report — which reviewed anticipated impacts to the 2024-25 fiscal year budget cycle as the result of overspending, new labor contracts and revenues coming in below projections.

Councilmembers Katy Yaroslavsky and Monica Rodriguez, who are members of the committee, were absent during the vote.

“What we are seeing are the impacts of a few years of very high inflation affecting consumer behavior,” Szabo said.

The committee approved plans to cover $168.67 million of the $288.6 million deficit, which include using $86.63 million from the city's Reserve Fund. Szabo recognized the deficit, which could grow, will likely cause the Reserve Fund to drop below 5% in the 2024-25 fiscal year.

The Reserve Fund is the account used to defend the city against unbudgeted or unforeseen events that may impact the city's fiscal solvency. The city's reserve

“It's unclear whether we're in a recession or not. Our revenues that we rely on are softening. If we were to hit a recession, that's why we are raising the flag on the condition of the Reserve Fund.” — Los Angeles City Administrator Matthew Szabo