LA Mayor Karen Bass discusses budget, layoffs in State of the City address

LOS ANGELES - Los Angeles Mayor Karen Bass delivered her State of the City address, focusing on Los Angeles' recovery from wildfires, budget challenges, and reshaping city governance. Key topics include the city's deficit, homeless crisis, public safety, and federal policies impacting local affairs.

What we know:

Mayor Bass spoke at City Hall around noon Monday, addressing the city's rebuilding efforts in Pacific Palisades after January's wildfires. 

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$1 billion budget deficit

"My proposed budget unfortunately includes layoffs, which is a decision of absolute last resort," Bass said during her speech at City Hall. "So let me assure you, our hard-working public servants, that I will never stop fighting for you."

With a deficit of almost a billion dollars, Bass announced that layoffs are unavoidable. She is proposing eliminating 1,647 filled and vacant positions, which is already getting a strong reaction from the unions representing city employees. 

Bass noted that she will be in Sacramento later this week alongside City Attorney Hydee Feldstein Soto to lobby state legislators on a potential bill intended to cap damages paid out by municipalities. Additionally, city officials are waiting on an answer from Gov. Gavin Newsom about a $2 billion funding request to help with budget strains while mitigating city worker layoffs and fire recovery costs.

According to the mayor, the city is taking steps to make LA run more efficiently by consolidating departments and restoring the reserve fund, which has been depleted due to an increase in liability payouts.

She said streamlining city services is necessary to make government more efficient. For example, she said upgrades or maintenance to a single street can involve multiple departments, resulting in work being delayed.

"This is a broken system, and to turn L.A. around, we have to fix this," Bass added.

The fire and police departments won't be impacted. In fact, the fire department will get an additional $103.7 million and 227 new positions.

While the LAPD's budget will increase by $6.1 million.

Wildfire recovery 

Bass spoke on the recovery effort underway in the Pacific Palisades, which was significantly destroyed by the Palisades Fire on Jan. 7. Multiple fires broke out in the city of L.A., as well as the Eaton Fire in Altadena, an unincorporated area of the county of L.A. The mayor once again stated that recovery is on track to be the fastest in California history.

"We still have a long way to go -- and for those who have lost a home each and every day is a day too long. We want to be fast, we want to be safe and we want to be resilient," Bass said.

The mayor discussed three new initiatives to help Palisades residents build faster. Bass said the city will establish a self-certification program to reduce redundancy in the permitting process; use AI technology for plan check reviews; and she also called on the City Council to pass an ordinance that would waive all plan check and permit fees so Angelenos can rebuild in the Palisades.

Crime and homelessness in LA

She also used her speech to highlight what she called the city's success in public safety, noting that overall crime declined in 2024. Bass reported the Los Angeles Police Department reached a four-year-high in job applications, but she said the hiring process needs to be streamlined to get more officers on the streets.

The mayor emphasized that she will continue her signature program, Inside Safe, to address encampments and bring unhoused people inside into temporary housing.

City officials have touted the results of the 2024 Greater Los Angeles Homeless Count, which noted there was reduction in homelessness for the first time in six years. There was a 10% reduction in street homelessness in the city of L.A., as well as a 38% reduction in encampments.

She noted the county's recent decision to withdraw funding from the Los Angeles Homeless Services Authority, saying she was concerned the move could undue recent successes.

"Moving forward, we must make sure we have a comprehensive and regional approach."

The county Board of Supervisors advanced a proposal to create its own department to manage regional homeless services, effectively defunding LAHSA -- a joint city-county agency criticized for inefficiency, waste and lack of transparency. LAHSA officials said the agency grew rapidly in recent years and has since taken steps to address those issues.

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The new county agency is expected to be in place by Jan. 1, with all funding pulled from LAHSA and transferred to the new department by July 1, 2026.

Bass focused on economic development in the city, with investments in jobs, housing and opportunities. But she noted that tariffs and trade wars can make the local economy worse.

"But we are fighting here in L.A. to create better paying jobs. And make no mistake -- we will protect every Angeleno, no matter where you are from, no matter when you arrived in L.A. ... because we know how much immigrants contribute to our city in so many ways," Bass said.

Bass' message to the city 

In the end, the mayor had a single message for city workers and Angelenos: Let's work together and turn Los Angeles around.

"The state of our city is this -- homelessness is down, crime is down. These are tough, tough challenges, and they show that we can do so much more," Bass said during her speech at City Hall. "We need a fundamental overhaul of city government to deliver the clean, safe, healthy and orderly neighborhoods that Angelenos deserve in the place they call home -- and to reverse decades of failure on homelessness."

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