UPDATE: The Los Angeles City Council has just launched the Budget and Finance Advisory Committee, tasked with addressing the city’s urgent financial challenges following a staggering $1 billion budget deficit. The committee held its inaugural meeting on November 24, 2025, kicking off a two-year initiative aimed at long-term fiscal stability in the wake of ongoing structural issues.
Councilmember Katy Yaroslavsky, chair of the committee, emphasized the need for robust solutions that go beyond annual budget fixes. “We cannot keep repeating the same budget process every year and expect different results,” Yaroslavsky stated. “Our revenue model has not kept pace with the needs of a modern city.”
The committee, which includes former City Controller Ron Galperin as chair and Jessica Lall as vice chair, is composed of five experts committed to finding sustainable budgeting strategies. This urgent formation comes as Los Angeles grapples with rising costs, weak revenue growth, and a strained reserve fund.
In a previous budget cycle, the city managed to avert significant layoffs through revised spending plans, but officials warn that ongoing financial pressures remain. City Administrative Officer Matt Szabo highlighted that approximately 80% of city expenditures go toward personnel, revealing the precarious nature of the city’s financial health.
At the meeting, Szabo shared a troubling forecast for the upcoming fiscal year, indicating a potential $91 million budget gap. He cautioned that structural balance could only be achieved if this year’s cuts are maintained, no recession occurs, and no new major services are introduced.
Yaroslavsky urged the committee to focus on critical structural issues, including asset management and transparency reforms. The advisory group is expected to convene every month, with the next meeting scheduled for January 12, 2026.
Local advocates for budget transparency welcomed the formation of the committee but stressed the importance of public involvement. Budget Advocate Lionel Mares expressed hopes for the committee to address soaring liability costs impacting city services and to ensure robust public engagement in the budgeting process.
The committee’s efforts will be supported by city staff and two graduate fellows from the UCLA Luskin School of Public Affairs, funded through a partnership with the California Community Foundation. As the city faces its financial reckoning, Los Angeles residents are urged to stay informed and engaged with the committee’s work.
This developing story underscores the urgent need for innovative financial solutions in Los Angeles, as the city strives to secure its fiscal future while maintaining essential services for its residents.
