In September, LA City Council budget chair Katy Yaroslavsky warned that an ambitious $2.6 billion plan to expand the LA Convention Center would lead to the city “having to cut our city workforce to offset the costs of this project for years to come.”
And she predicted that the city services that “all of us would agree … suck” would get even worse if her colleagues voted to move ahead with $2.9 billion project to expand the LA Convention Center.
“We aren’t even going to be able to afford the level of service that we have right now — which is crap,” she said.
Yaroslavsky’s colleagues had argued in favor of the project, saying it was equally risky to pass up on the expansion project. The City Council ended up green-lighting the project at that Sept. 19 meeting. They said a bigger convention center was needed to attract tourism revenue to Los Angeles, as the city hosts the Olympics Games in 2028.
Cut to three weeks later, and the first indication that things were starting to go in the direction Yaroslavsky had warned it would, came when LA Mayor Karen Bass and the City Administrative Officer informed dozens of city department heads that they needed to find ways to cut 5% from their budgets as part of the spending proposals that they needed to turn in for the next fiscal year, which starts July 1, 2026.
In a 66-page budget instruction memo dated Oct. 6, Bass and the CAO advised the general managers to consider “eliminating vacant positions and reducing expense spending prior to proposing the elimination of filled positions” when meeting the 5% target for cuts.
Those instructions included a chart that shows the dollar amounts that the 5% cut would amount to. For example, with the Fire Department, it would be $44.8 million, and for transportation, that target amounts to nearly $10 million. There were no reduction amounts listed for some departments, including the mayor’s office, the City Council, the library department, and the ethics commission.
Budget reduction target chart included in the budget instructions for the upcoming year.
The budget instructions have set off concerns that layoffs were “looming,” a worry voiced in the publication Mar Vista Voice, which had first revealed the cost-cutting exercise in an Oct. 10 article that pointed to internal emails and a “budget template” spreadsheet. That article was followed up with a second one on Oct. 17 sharing further details including the sentiment that the 2026 World Cup and the 2028 Olympics games were “reshaping city spending priorities.”
The CAO provided the Oct. 6 budget instruction memo to The LA Reporter last week. That memo confirmed that general managers were being asked to look for ways to slash their budgets as part of the spending proposals that they are expected to submit by November 21.
The budget-cutting exercise comes as city workers had just reached an agreement with their bosses – the mayor and the City Council – to stave off all of the remainder of the more than 1,600 layoffs planned in this fiscal year. That happened after some workers agreed to reduce costs for the city by taking up to five unpaid days off.
The city has faced a fiscal crisis in recent years, with city leaders needing to close a $1 billion budget gap earlier this year in order to adopt the budget for this fiscal year, which began about four months ago on July 1. The city also faces continued financial challenges from the federal government’s immigration enforcement raids which have suppress economic activity in Los Angeles and cuts to federal funding instigated by the Trump Administration.
The 5% cuts are also being contemplated as city leaders like Yaroslavsky brace for more lean years to come, thanks to the LA Convention Center expansion. The CAO in September estimated that the operation of the expanded convention center will cost taxpayers an average of $89 million a year for the 30 years starting in 2029. In many of the earlier years, from 2030 to 2046, the annual amount siphoned what might have been used for city services, such as street maintenance and tree-trimming, is anticipated to be over $100 million.
Much could be seen as hanging in the balance when it comes to the LA Convention Center expansion projects, which some hope would save the city’s financial situation, rather than worsen it.
The mayor and CAO’s instructions to city departments to find ways to slash budgets came mere days after Bass and other city leaders had taken part in a groundbreaking ceremony for the LA Convention Center expansion project on Oct. 1. They were joined by downtown LA business groups and labor groups that supported the project.
Some of those on the council who supported the expansion project, such as Council President Marqueece Harris-Dawson, argued that it was an “equally expensive gamble” to pass up on building a bigger LA Convention Center in time for the upcoming Olympic Games in 2028, which they look at as an opportunity for economic stimulus and to create jobs.
But some many have darker forecasts. Members of NOlympics LA, a coalition of community groups founded in 2017, have opposed efforts to host the Olympics in Los Angeles and have urged city leaders to call off the Games. The group is part of an international movement pushing back against the Olympics, due to its history of gentrifying neighborhoods, increasing city’s policing infrastructure, and other damaging effects it has had on host cities, including financially.
A NOlympics LA representative reacted to the news of the budget-cutting exercise in a statement to The LA Reporter, saying that “this is the cost when your city leadership foolishly prioritizes mega events and tourism over the lives of the people who live here.”
“This austerity, in one of the richest cities on the planet, comes at a time when the city is already reeling from every possible social issue and portends a truly bleak future for this city,” the NOlympics statement read.
The coalition has pointed to the effects the planned 2028 Games have already had on LA’s houseless community and immigrants. Their partners include tenants and tenant advocate groups like SAJE and the LA Tenants Union; Black Lives Matter, an abolitionist organization that was started in response to police brutality and violence against Black communities; and mutual aid groups like LA Street Care that organize with unhoused communities.
LA City Controller Kenneth Mejia, who serves as the city’s chief accountant and is part of the city’s financial oversight system along with the CAO and the treasurer, pointed to existing tourism revenue being flat in Los Angeles, even after new venues such as the BMO Stadium in 2018 and the SoFi Stadium in 2020 have opened, Mejia wrote in his formal comments opposing the expansion plan.
“If the city cannot generate enough revenue to cover the additional cost of expansion, we would need to find cost savings somewhere else in the budget, which the city has been doing by cutting funding for already understaffed City departments, which has been detrimental to city services,” Mejia wrote.
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