Your non-politician’s guide to LA’s incoming city budget

This week, the Los Angeles City Council will kick off a series of public hearings about the city’s $13.9 billion budget proposal, which includes laying off more than 1,600 city workers.

The budget is essential for city operations, and decisions made over the next few weeks will have a big impact on L.A.

Public budget hearings begin Friday at Van Nuys City Hall. The public can weigh in on these changes at the two hearings that allow in-person public comment on April 25 and April 28.

The documents and discussions, which give you a peek into how the city is planning for the future, are incredibly dense. To make sense of it all — and to explain what the budget means for you — we’ve compiled this guide to understanding the budget.

How is the budget structured?

The budget sets out the city's spending plan for the next year — and it's based on the projected health of property, sales and other tax revenue. As my colleague Brianna Lee previously explained, the mayor proposes the budget, and then a series of hearings take place to discuss the details and issue recommendations. Then the budget will go on to the full City Council for a vote.

The budget is made of multiple funds. Here are the main categories:

• The general fund: This is the city's primary bank account. It's where tax revenue known as unrestricted money, which can be spent on a wide variety of city services, is deposited.
• The reserve fund: This is where unrestricted cash is set aside for unexpected needs and emergencies, like a savings account.
• The budget stabilization fund: Cash from prosperous years is set aside to help offset lean financial years.
• Special funds: These are funds created for a special purpose, and the money in them is restricted. An example is the special gas tax fund — money from that fund can only be spent on streets. L.A. has more than 600 special purpose funds.

Former city controller Ron Galperin said to think of special purpose funds like a trip to the grocery store where you have to pay separately for most of what’s in your basket.

“You can only use one account to buy tomatoes, and you can only use another account to buy cucumbers, and yet another account to buy your milk,” Galperin said. “Imagine how complicated that would be to just get out of the checkout line.”

Beyond the main spending categories, things get a bit more complicated.

You'll see three entities listed on the city’s budget, but their budgets are independent and get approved by a commission. Those are the Department of Water and Power, the harbor, and L.A. World Airports (which includes LAX).

Chief deputy controller Rick Cole said certain other department budgets, such as the library, are sheltered under the city’s charter from overall budget cuts. They’re still subject to City Council approval as more of a formality.

These financials are included in the mayor’s budget but in a different chapter from the rest of the proposed department budgets.

The documents and calculations

All of the documents are publicly listed at this link on the City Administrative Officer’s website under the 2025-26 section. You’ll see the proposed budget at the top, as well as current and previous years' budgets.

Where your tax dollars go (and don’t go) each year can tell you where city leaders’ priorities are, but money is also a finite resource that has to be balanced against competing needs.

The city of L.A. uses a “modified program budget” system to make calculations. In simple terms, this means factoring in service needs for different departments, historical reviews of their past budgets and performance metrics.

If you want to know how a department is measuring up to its goals, the budget documents include metrics that can help you compare programs and evaluate progress.

And what do all those terms mean? Budget documents are full of finance jargon. This budget glossary for the state of California can help you decipher key terms, such as the difference between “allocation” and “appropriation.” Bass’ proposed budget also includes a glossary in section seven.

Where to begin exploring the budget

Jacky Guerrero is the director of equity in community investments for the nonprofit Catalyst California in L.A. She works to make the city’s budget process and documents easy to understand for community organizations.

The mayor’s proposed budget is composed of these documents:

• The mayor’s budget summary (which hadn't been posted as of this story's publication).
• The proposed budget.
• Details of department programs in two volumes (also known as the Blue Book).
• Revenue outlook.
• Supporting information.

You probably don’t have time to sift through hundreds of pages of financial reports, and that’s OK. The mayor's budget summary may be right up your alley when it's released.

“The mayor’s budget summary is … their way of trying to produce a more digestible sense of what is in these very dense documents,” Guerrero said. “It’s more focused on issues that resonate with people, not departments.”

The budget documents are a bit like nesting dolls. The proposed budget is a longer version of the summary. And the Blue Book is a longer version of that and gets much more technical. Then out of the supporting documents, Guerrero said the revenue outlook is important to look over.

“It is giving you a sense of projections of sales tax revenues [and] how that money is generated,” Guerrero said. “These are actually important details because these are things that we pay into.”

Guerrero said she trains her staff to first look over the table of contents of the budget documents. To understand where to look, it’s a good idea to get comfortable with knowing what’s in there. The "mayor’s message" in the main proposed budget can help you get a sense of the city’s priorities. In this case, the 2025-26 message focuses a lot on wildfire recovery, liability payments and the city's downward economic outlook.

Once you know the overview, look at the departments that interest you.

How much can the budget change year to year?

City budgets typically don't change quickly. While there have been movements to realign the city’s financial priorities overall, such as investing more into community programs and less into police, you won’t see a big difference year over year.

The vast majority of Bass' proposed budget will not be changed during the budget hearing review process.

Some of that is by design. The city’s process has a very short turnaround time. Almost as soon as the budget is put into action, leaders begin planning for the following year. Cole, from the city controller’s office, said this is why they’re advocating for L.A. to move to a two-year budget term.

“The budget process takes 11 months,” Cole said. “So just cranking through the process eats up an enormous amount of time, energy, paper and angst, which leaves actually very little time to think deeply about how we're spending the money.”

It’s an economic thing too. Making sharp changes to the budget, Cole said, could lead to layoffs of city staffers, which is why changes happen incrementally. The city of L.A. is among the largest employers in L.A. County.

While the budget documents were only made public this week, the likelihood of them changing much at this stage is rather low. That means public input and the incoming back-and-forth between the mayor and City Council on finances likely won’t lead to drastic differences in what gets adopted.

But it may not be small peanuts either.

“It’s what insiders at City Hall call budget dust,” Cole said. “For the average person, $750,000 is a lot of money, but it’s less than one-hundredth of a percent of the budget. The budget hearings do have an impact — probably the most in the 1% range, but 99% of the budget that the mayor proposes will be adopted.”

The city’s first of nine budget hearings begins Friday at 1 p.m. in Van Nuys.