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Los Angeles county is experiencing unprecedented financial challenges amid growing costs from the historic wildfires that ravaged the region earlier this year and a $4bn sex abuse case settlement, the county CEO said this week.
The region faces roughly $2bn in expenses related to January’s fires, which killed 30 people and destroyed nearly 17,000 structures. Earlier this month the county announced it had a $4bn agreement to settle thousands of claims of sexual abuse in juvenile facilities dating back 1959 – the largest such settlement in US history.
The potential loss of hundreds of millions of dollars in federal funding and slower property tax revenue growth have added to the county’s mounting challenges.
The county is expected to cut its budget by nearly $90m dollars under a spending plan proposed by the LA county CEO, Fesia Davenport.
“We are in uncharted territory with these simultaneous pressures on our budget,” Davenport said. “Any of these alone would be daunting, but taken together, these challenges – the wildfires, the AB 218 settlement and the threat of deep cuts in federal funding – are cause for great concern.”
The settlement will impact the budget for decades to come, Davenport said, with the county anticipating payments of hundreds of millions of dollars through 2030 and millions more through 2051.
Federal reimbursements for some wildfire costs are expected to take years, Davenport said.
The county is cutting 3% from department budgets and plans to eliminate more than 300 currently vacant positions. With proposed supply cuts, delayed equipment purchases and a reduction in the scope of certain programs, the county expects to save $88.9m, according to a county statement.
Layoffs are not anticipated at this time, Davenport’s office reported, adding that the recommended budget “reflects a high degree of caution, restraint and uncertainty in the face of the cascading budgetary pressures”.
Meanwhile, the city of Los Angeles continues to reel from the impact of the January wildfires. The city is facing a nearly $1bn budget gap that officials have said “makes layoffs nearly inevitable”.
“We are not looking at dozens or even hundreds of layoffs, but thousands,” the city administrative officer Matt Szabo told the city council last month.
