Mayor Karen Bass delivered her State of the City address at City Hall on Monday, April 21, which centered on the wildfire recovery effort, public safety, the homelessness crisis and what the $800 million shortfall in Los Angeles’ 2026 spending plan means for the city.
The shortfall can be attributed to “lower-than-anticipated revenue from taxes and new labor contracts with police, civic workers and firefighters,” which are expected to increase costs by $250 million next fiscal year, according to ABC7.
“Make no mistake, you are this city’s greatest asset. Every single day you come to work in dedicated service to the people of Los Angeles,” Bass said, referring to the city’s workforce. “But I want to be straight with you. My proposed budget, unfortunately, includes layoffs, which is a decision of absolute last resort.”
Bass said that to balance the shortfall, Los Angeles has reduced funding for the mayor’s office, eliminated unfilled positions and postponed several capital projects, but layoffs are the inevitable next step. These layoffs may target more than 1,600 city workers.
Bass introduced some possible solutions to bring revenue back to the city, and cited L.A.’s stagnancy as the reason for the declining local entertainment industry. As part of her plan to “Bring Hollywood Back,” Mayor Bass proposed a tripling of tax credit for studios filming in LA.
“When I was speaker of the assembly, we passed the state’s first production tax credit, but we didn’t keep up and other states and other countries are now taking our good middle-class jobs,” Bass said.
She also acknowledged that attractions like the new Los Angeles Rams practice facility, construction at LAX and a new convention center, L.A. “will attract thousands of business travelers.” She also stated that the 2028 Olympics would increase revenue.
Bass noted that under her administration, L.A. wildfire recovery “is on track to be the fastest in California history.” Bass acknowledged that it will take time until the city is completely restored, but she said Los Angeles “has issued permits to rebuild twice as fast as after the Camp and Woolsey fires.”
“We restored water nearly a year and a half faster than after the Campfire and we restored power in just two months,” Bass said.
Bass reported that with Los Angeles Police Department (LAPD) Chief Jim McDonnell, efforts to reduce violent crime and property crime in Los Angeles have been successful.
“Last year, homicides fell by 14%, gang-related homicides in communities most impacted fell by 45%, the number of shooting victims fell 19% and we’ve intensified safety efforts on Metro,” Bass said, referencing the LAPD’s 2024 End of Year Crime Report.
Bass linked homeless encampments to crime and increasing fire risk in Los Angeles.
“The LAPD will report that crime is down at locations where encampments were removed and people were housed. Just last week, the chief of the fire department shared that nearly a third of fires in Los Angeles involve someone who is homeless,” Bass said.
Bass claimed that when homeless encampments are removed, small businesses and residents flourish.
“After years of increasing homelessness, we are finally reversing that trend — homelessness is down,” Bass said. “That includes a 10% reduction in street homelessness and a 38% reduction in makeshift structures and tents.”
To continue to address the homelessness crisis, Bass said the city must “fix the broken system” by addressing outdated policies and habits, such as the city’s fixation on housing the homeless in permanent housing.
“The county rigidly over prioritizes permanent housing to the extent that people were just left on the street while housing was being built,” Bass said. “To leave people on the streets until the projects are complete is unacceptable.”
To this end, Inside Safe, Mayor Bass’s homeless relief program, housed more than 3,000 homeless individuals in temporary motel housing, with the aim of transitioning them into permanent housing and programs that serve as a support system.