L.A. city budget shortfall grows to nearly $1 billion, with layoffs 'nearly inevitable'

L.A.'s financial problems exploded into a full-blown crisis on Wednesday, with the city's top budget official announcing that next year's shortfall is now just shy of $1 billion, making layoffs "nearly inevitable."

City Administrative Officer Matt Szabo advised the City Council to focus on cost-cutting measures, including a potential reduction in the size of the workforce, to bring the budget into balance for 2025-26.

Szabo, in his presentation to the council Wednesday, attributed the city's financial woes, in part, to increased spending on legal payouts, which have ballooned over the last few years. Tax revenues have been coming in much weaker than expected — and are expected to soften further in the upcoming budget year, which starts July 1.