The Los Angeles County Board of Supervisors approved a recommended budget on Tuesday, April 15 that will reduce spending by $1.3 billion from last year and cut 310 unfilled positions, reductions stemming from billions of dollars in county lawsuit settlements as well as up to $2 billion in losses and costs from the recent wildfires.

In presenting her scaled-down recommended budget, CEO Fesia Davenport said the 2025-26 budget reflects reductions in revenues from local taxes, as well as state and federal allotments, paired with whopping increases in unanticipated expenditures.

“The road ahead of us is difficult and paved with a series of unprecedented challenges,” she told the board on Tuesday. “Taken together, they have the potential to seriously destabilize the county budget.”

A first-draft of the proposed FY 2026 budget was approved by the board on a 4-0 vote, with Supervisor Janice Hahn absent.

Each county department faces 3% budget cuts from the austere spending plan. Departments are also curtailing expenditures on contracting services and supplies. The situation is volatile and could get worse, county officials said.

Federal funding cuts could adversely affect the county’s budget, something happening already. Davenport said a proposed rescinding of $45 million in federal public health funding will be a jolt to the county’s health care budget — and could be a harbinger of more cuts to come.

“The uncertainty at the national level coupled with local budgetary pressures is painting a bleak picture of the county’s economic outlook in the coming years,” Davenport wrote in a lengthy budget letter to the board dated April 15.

The recommended $47.9 billion budget is down $1.3 billion from the 2024-25 Final Adopted Budget of October 2024. The cut in budgeted or vacant positions will result in $88.9 million in ongoing savings, while no layoffs are anticipated, Davenport said. Though the proposed budget includes 14 new positions, that’s a small number when compared to prior recommended budgets, bringing the county’s total budgeted workforce to 117,100, Davenport wrote.

About 13% of the county’s budget comes from federal dollars, which pays for thousands of county employees, either in whole or in part. “The county would be unable to support the cost of hundreds of employees currently paid with federal funding if that funding were to disappear,” she wrote.

The taking back of federal public health grants is being challenged in the courts and a temporary restraining order has been granted. The outcome of that funding source remains uncertain.

Supervisor Hilda Solis was concerned about a federal budget bill put forth by Congressional Republicans that will result in $880 billion in cuts to Medicaid, which supplies health insurance to millions of low-income county residents. Also, the Congressional budget plan would result in cuts in CalFresh, a food program helping those who cannot afford to feed their families.

“If the state doesn’t get their share (of federal dollars), we won’t get our share. We have an obligation to protect as much as we can for our residents,” Solis said.

Supervisor Kathryn Barger said part of the budgetary pressures include increases in General Relief, a county-funded program that provides cash if an adult is without any income or resources. This is provided by a kind of debit card, known as EBT or Electronic Benefits Transfer. With criminals skimming or stealing from EBT holders, the county must reimburse those funds, adding onto the county cost, she said.

The Palisades and Eaton fires, along with higher mortgage rates, have slowed home sales, dampening county property tax revenues, Davenport said. Home sales have declined by 41% since 2021, Davenport reported. This has resulted in a drop in the county’s share of property taxes. That budget revenue has declined from $450.5 million in 2022-23 to $233.9 million projected for next year’s budget, representing a $216.6 million decline.

Supervisor Lindsey Horvath was concerned about the next county emergency, possibly made worse by climate change, such as fires and floods. She noted that the county’s Office of Emergency Management asked for 25 new positions to beef up staffing, but the new budget only includes six new positions.

The biggest hit to the upcoming budget and those in years ahead is the settlement of 6,800 sexual abuse claims against the county, some dating back to the 1950s. Settlement agreements resolve claims from the Child Victims Act claims under Assembly Bill 218. That initiative waived the statute of limitations on sexual abuse cases and created a three-year window to allow victims of childhood sexual abuse to present their allegations.

Most of the claims date from the 1980s, 1990s, and 2000s and stem from allegations of abuse at county Probation Department facilities and at the now closed MacLaren Children’s Center in El Monte. Davenport stressed the abuse settlement is “by far the costliest in county history.” The settlements are expected to be paid out through a combination of county funds, budget cuts and borrowing over a number of years.

Davenport said the impact means county payments of hundreds of million of dollars each year through 2030, with lesser amounts continuing through 2050-51.

Some revenues are increasing.

Measure A  — a half-cent sales tax — helps maintain existing programs and provide more revenue to address homelessness and also homeless prevention and building of affordable housing in the county. The measure replaces a quarter-cent county sales tax approved by voters in 2017, under then-Measure H. That sales tax had a 10-year lifespan, and it was set to expire in 2027.

It is estimated the new measure will bring in about $1.1 billion annually. Of that, the county will get more than $500 million for homeless services, the county reported. Most of county’s portion will go toward a new county department on homelessness.

“We want to make sure we will be able to respond to emerging needs,” Horvath said.