The Brief

Los Angeles is facing a budget deficit of nearly $1 billion, which will likely lead to cuts in staffing and affect some city services, officials warned on Wednesday.

L.A. Mayor Karen Bass directed the city administrative officer to develop a proposal to save between $500 million and $900 million for the fiscal year that starts July 1.

And Councilmember Bob Blumenfield, who serves as vice-chair of the city’s Budget Committee, told LAist that layoffs or compensation deferrals for city workers are inevitable.

"It's hard to imagine the math without involving serious labor concessions of some sort," Blumenfield said. "And I don't say that because I want that. Certainly that's the last thing I want.

"But 80% of the city’s expenditures are labor costs — are people.”

How we got here

L.A. is “in a particularly challenging financial position,” according to the city administrative officer. The city has overspent this fiscal year by about $300 million, in part because of rising liability costs, generous labor contracts with city workers, and spending associated with the Palisades Fire.

In addition, general fund revenues are $13 million below their projection, and an uncertain economic outlook means revenues could drop significantly next year.

“The real question at hand now is by how much will revenue fall short of budget?” Chief Administrative Officer Matt Szabo wrote in his mid-year financial status report.

Szabo also said he expects the Palisades Fire “to have a notable impact on city receipts due to a decline in economic activity as well as from the tax relief or deferrals for business, sales and property tax payments currently being considered by the city and county.”

Federal actions

Recent actions by the federal government have added to uncertainty in the city’s financial outlook, according to the chief administrative officer.

“These include executive orders aimed at de-funding established programs and initiatives as well as increasing enforcement actions against our immigrant communities. In some cases, these actions have been rescinded or legally challenged, making it impossible for the city to predict the magnitude, timing and likelihood of any impacts.”

Requests from Bass

Bass has asked for proposals to reduce liability costs, which soared to $320 million or three times what was budgeted for the fiscal year 2024-25.

Read more: LA is on the hook for more than half a billion in liability payouts in just 2 years. 4 of the costliest cases

The mayor has also asked for proposals to change the number, structure and responsibilities of departments and reassign city services to refocus the city’s work on its most critical services.

In addition, Bass asked the chief administrative officer to come up with ways to “realize payroll and benefit savings.”

What's next and how does approving the budget work?

The mayor is expected to release her proposed 2025-26 budget April 21.

Most city budget negotiations happen behind closed doors. Starting in the early fall, the L.A. mayor works with city department heads to figure out what the budget should look like. The mayor outlines her priorities, and department heads submit specific requests for consideration.

After the mayor releases the official budget proposal in April, the City Council’s budget committee holds a series of hearings to discuss the proposal and listen to feedback from the public. The committee submits recommendations for changes.

The full City Council then has to vote on the proposed budget and the recommended changes. The approved budget takes effect on July 1, running through June 30 of the following year — this is what’s known as a “fiscal year.” Each fiscal year is referred to based on the year the budget ends. For example, the current budget year is 2025. It runs from July 1, 2024, to June 30, 2025.

Keep an eye on your local government

The best way to keep tabs on your local government is by attending public meetings for your city council or local boards. Here are a few tips to get you started.

• Find meeting schedules and agendas: City councils usually meet at least twice a month, although larger ones may meet weekly. Committees and boards tend to meet less often, typically once a month. You can find the schedule and meeting agenda on your local government’s website, or posted physically at your local city hall. Find more tips here.
  
• Learn the jargon: Closed session, consent calendars and more! We have definitions for commonly used terms here.
  
• How to give public comment: Every public meeting allows community members to give comment, whether or not it’s about something on the agenda. The meeting agenda will have specific instructions for giving public comment. Review more details here.
  

LAist’s Brianna Lee contributed to this report.

The Los Angeles County Sheriff’s Department has mostly blocked efforts to investigate misconduct within its ranks, according to the county inspector general, who announced his retirement Tuesday after 12 years on the job.

In an open letter, Max Huntsman cited examples of how the county has thwarted his efforts to watchdog the department, which in the past has been plagued with accusations that deputies use excessive force and lie on the job.

Huntsman said one example is former Sheriff Alex Villanueva’s misuse of criminal enforcement powers to discredit critics, such as opening an investigation into former County Supervisor Sheila Kuehl.

Villanueva was sheriff from 2018 to 2022.

“My requests for investigation were rejected,” Huntsman’s letter reads. “Even after receiving an official subpoena, the Sheriff’s Department has failed to turn over records regarding the improper surveillance.”

He added: “Sometimes members of the public wonder if frightening new surveillance techniques will be used for improper purposes under the guise of criminal investigation. Sadly, the answer is yes.”

Before becoming inspector general in 2013, Huntsman, 60, was a deputy district attorney who specialized in public corruption. He told LAist on Tuesday that the inspector general job wasn’t something he wanted initially.

“I didn’t want to go work for politicians,” he said. “But the need to provide some kind of independent reporting and analysis was significant.”

The Sheriff’s Department issued a statement saying it valued the Office of the Inspector General and all county oversight bodies and that it wished Huntsman and his family well in his retirement.

The department said it “continues to make great strides in advancing the department in a transparent manner.”

LAist also reached out to the county CEO and county counsel for comment, but they declined.

After George Floyd

In the letter, Huntsman says the state of California has come a long way in strengthening the power of local law enforcement oversight bodies, in part because of the 2020 murder of George Floyd by police in Minneapolis.

After widespread protests — and lobbying by Huntsman — the state provided authority to inspectors general to enforce subpoenas requiring law enforcement agencies to hand over documents and authorized external investigation of police misconduct, including deputy gang conduct.

The Sheriff’s Department — backed by county lawyers — has resisted.

“Los Angeles County may not follow those laws, but it will not be able to avoid them forever,” Huntsman wrote. “The county refuses to require the photographing of suspected gang tattoos in secretive groups that the undersheriff has identified as violating state law.”

“Just a few weeks ago, we requested some information regarding an investigation, and a pair of commanders refused to give it to us,” Huntsman said in an interview with LAist.

Origin of the office 

The Inspector General’s Office was created by the county Board of Supervisors in 2013 in response to a scandal that included former Sheriff Lee Baca covering up the abuses of jail inmates.

Baca went to federal prison.

Since then, the office has issued dozens of reports with recommendations for improving living conditions inside jails that some have described as “filthy,” stopping abuses of juveniles inside juvenile halls and providing shower privacy for inmates as part of the requirements under the Prison Rape Elimination Act.

“All of these abuses were reported by the Office of Inspector General and recommendations were ignored,” Huntsman wrote. Often, it took court orders to enact change.

“When we first blew the whistle on the torturous chaining of mentally ill prisoners to benches for 36 hours at a time, it was only a court order that ended the practice,” he wrote. “Time and time again, this pattern repeated itself.”

Huntsman wrote the county has permitted the Sheriff’s Department to block oversight and defunded the Office of Inspector General by removing a third of its staff.

“It's not surprising the county has driven out two successive chairs of the Sheriff Civilian Oversight Commission,” he wrote.

“Government always claims to value transparency and accountability, but shooting the messenger is still the most common response to criticism,” Huntsman wrote.

Despite setbacks, Huntsman values work 

Huntsman told LAist on Tuesday that he was proud of his career as a public servant.

“I’ve really enjoyed the work and I’m sad to have it end,” he said.

It’s a sentiment he echoed in his letter, adding that despite the setbacks and roadblocks, he was proud of the people with whom he shared the office.

“It has been my honor to work with a talented, brave and tireless group of public servants to ensure that the public knows what its government is doing,” he wrote.

He noted the inspector general’s reports are fact-checked by the office and public.

“When government abuses occur, they are sometimes kept secret, but that is no longer the case for much of what is happening in Los Angeles County,” Huntsman wrote. “What you do about it is up to you.,”

Huntsman’s last day is Friday.

Topline:

The backstory: Last month, the council's Transportation Committee voted to bring a proposal forward to implement a policy change that allows the city to impound and immediately destroy abandoned or inoperable RVs worth less than $4,000. The change is inspired by new state law AB 630, which was created to prevent previously impounded RVs from ending back up on the street.

The motion, authored by Councilmember Traci Park, reports that abandoned RVs pose as public and safety hazards.

What's next: Councilmember Nithya Raman requested that an implementation plan be presented to the council's public safety and housing and homelessness committees.

Go deeper: L.A. pushes policy to make it easier to remove RVs from city streets.

The U.S. Department of Education announced Tuesday that it had reached a proposed settlement agreement to end a popular, yet controversial Biden-era student loan repayment plan.

The Saving on a Valuable Education plan, better known as SAVE, was the most flexible and generous of all income-driven repayment plans, promising expedited loan forgiveness and monthly payments as low as $0 for low-income borrowers. Republican state attorneys general, led by Missouri, sued the Biden administration, arguing in court that SAVE was too generous.

The legal challenges put all SAVE borrowers in limbo for months, during which they were not required to make payments on their loans — even after many had already spent years in a pandemic payment pause. Interest resumed accruing on SAVE loans in August.

"The law is clear: if you take out a loan, you must pay it back," Under Secretary of Education Nicholas Kent said in a statement announcing the proposed agreement. "Thanks to the State of Missouri and other states fighting against this egregious federal overreach, American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies."

Tuesday's agreement, pending court approval, would end the long legal battle over SAVE by ending SAVE itself. The Education Department would commit not to enroll more borrowers in SAVE, to deny all pending SAVE applications and to move the roughly 7 million borrowers still enrolled in SAVE into other repayment plans — though some of those plans are also in flux.

The department also said student loan borrowers would have "a limited time to select a new, legal repayment plan." Borrowers will have to choose between two types of plans: 1.) fixed payment plans or 2.) plans with payments based on a borrower's income.

The two new plans created by Republicans' One Big Beautiful Bill Act (OBBBA) will roll out in July 2026, and will include a revised standard plan and a new income-driven plan called the Repayment Assistance Plan. Though SAVE borrowers will be expected to change plans before then.

The SAVE plan's days were already numbered. Under the OBBBA, borrowers would have had to change plans by July 1, 2028. Tuesday's news would move that deadline up, though the administration has not provided a timeframe for the changes.

If the proposal is approved by the court, transitioning millions of borrowers to other plans will be a Herculean feat for loan servicing companies that handle day-to-day loan operations.

"It's gonna be bumpy," says Scott Buchanan, head of the Student Loan Servicing Alliance. "Remember, SAVE borrowers have not been in repayment for years. They're gonna have a ton of questions and will need a ton of hand-holding to get back into repayment."

The settlement arrives as millions of borrowers are struggling to keep up with their payments.

"We are sitting on the precipice of millions of borrowers defaulting on their loans," says Persis Yu, of Protect Borrowers. "And instead of choosing to defend a plan that would have been affordable for these borrowers, this Department of Education has capitulated to the AGs and is going to make life much more expensive."

The American Enterprise Institute, AEI, recently published an analysis of the latest federal student loan data: In addition to the 5.5 million borrowers who are currently in default, another 3.7 million are more than 270 days late on their payments and on the edge of default. Another 2.7 million borrowers are in the earlier stages of delinquency. In all, some 12 million borrowers are worryingly behind.
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