The City's $14.9 billion budget for 2026-27
It is 69% larger than the 2016-17 budget, about 22% larger after inflation. It balances this year with one-time revenue and overtime budgeted as one-time, and the City Administrative Officer (CAO) projects shortfalls in the next two years.
About $61 million of the gaps the CAO flagged remain unfunded. Each section below gives its source.
Up 69% in a decade, about 22% after inflation
Comparing proposal to proposal, the City's budget grew from $8.8 billion in 2016-17 to $14.8 billion in 2026-27, and the General Fund from $5.6 billion to $8.6 billion (+55%). Consumer prices rose about 39% over the same period, so in today's dollars the total grew about 22% and the General Fund about 11%.
Total budget vs. General Fund
Proposed budget, FY2016-17 through FY2026-27 · $ billions
Inflation adjustment uses the U.S. city average CPI-U (BLS, via FRED series CPIAUCNS): July 2016 240.6, July 2026 333.9, a 38.8% rise. Budget figures are nominal, proposal to proposal, from the CAO's Supporting Information.
The budget has two parts: the General Fund and special funds
Of the City's $14.9B, $8.6B is the General Fund, which the Council can direct to any purpose. The other $6.27B is restricted: fees charged for a specific service, or taxes voters dedicated to one purpose. The source of each dollar determines what it can be spent on.
Every dollar the City collects, FY2026-27. Solid = the General Fund, which can be spent on any purpose. Light = restricted to the purpose of its source.
General Fund: general taxes, available for any purpose
Taxes and receipts not tied to any purpose. This is the portion of the budget the Council can direct to any use.
Special funds: each restricted to its purpose
Fees charged for a service, or taxes voters dedicated to a purpose. Each fund can be spent only on what it was raised for.
Every fund, with what each was budgeted, collected and spent: all City funds.
The headline number, in context
Most new revenue goes to costs already committed — pensions, benefits, salaries and continuing programs — and the CAO projects gaps returning in 2027-28.
layoffs proposed to close a deficit of nearly $1 billion.
layoffs. The budget balances on $411.8M of General Fund revenue growth plus one-time revenue; the CAO projects gaps in the two years that follow.
Four figures behind the headline number
From the City's budget documents and the rating agencies' published actions.
The proposal counted $149M of one-time revenue, and budgets $146M of recurring police and fire overtime as one-time funding.
The City Administrative Officer (CAO) flagged 7 funding gaps totaling about $148M in the proposal. The Council closed 3; about $61M remains.
S&P lowered the City’s general obligation rating to AA- (April 2025), Kroll to AA (May 2025) and Moody’s to Aa3 (March 2026). Fitch holds it at AAA.
The CAO’s outlook projects a $187M gap in 2027-28, before the cost of new labor contracts.
Council changes added a net 0.14% to the proposal
The Council adopted the budget 10-1 on May 27, 2026. Its changes added a net $21.4M to the Mayor's $14.85B proposal. The largest changes were reductions to the homelessness line items in General City Purposes and a larger amount set aside in reserve.
- Unappropriated BalanceClean Corridors $11.0M, payroll reconciliation $11.0M, 2028 Games venue approaches $5.0M, Winter Shelter $1.6M, Office of Major Events $1.2M; mid-year reserve raised from $38M to $49M+$50.8M
- Special-purpose fund appropriationsIncludes a $14.6M deposit to the Reserve Fund+$20.2M
- Capital & technology improvements+$5.3M
- City Planning+$3.0M
- Housing+$2.6M
- PoliceCivilian salaries +$5.4M, sworn salaries −$1.2M+$2.5M
- General City PurposesInside Safe (Homelessness Emergency) −$22.0M to $76.7M; Alliance settlement −$19.4M to $38.9M−$43.2M
- EngineeringMeasure M contract money moved into the capital program−$9.5M
- Street Services−$7.1M
- Sanitation−$6.1M
- Liability claims−$5.0M
Council adopted the Budget & Finance Committee report (as amended) 12-1 on May 21; the Budget Resolution itself passed 10-1 on May 27, and the Mayor signed it May 28. Adopted Budget figures: headline totals, General Fund revenue by source, special-fund revenue, appropriations by category, department appropriations, unrestricted-revenue shares, reserves and the Council's changes. Still proposal-era: the CAO's Four-Year Outlook and balancing waterfall (not re-issued since adoption), the service-level table, MOU cost impacts and the ten-year history series (proposal to proposal). The CAO's Areas of Concern are the proposal's, each marked with its status after adoption. Source: Adopted Budget 2026-27, Budget Resolution Appendix I (adopted minus proposed).
Most of the growth pays for costs already committed
The CAO's balancing table starts from last year's revenue base and adds $234.7M of required cost increases (pensions, health benefits, salary steps) and $549.0M to continue existing programs, against $111.9M for new or expanded services.
Labor-contract cost increases, by department
Negotiated MOU cost increase on the 10 most-affected departments · $178.2M total
- Police$71.5M
- Fire$52.5M
- Sanitation$14.3M
- City Attorney$7.8M
- Building & Safety$7.7M
- Recreation & Parks$5.5M
- Transportation$5.3M
- General Services$5.1M
- Library$4.4M
- Engineering$4.1M
| Name | Value |
|---|---|
| Police | $71.5M |
| Fire | $52.5M |
| Sanitation | $14.3M |
| City Attorney | $7.8M |
| Building & Safety | $7.7M |
| Recreation & Parks | $5.5M |
| Transportation | $5.3M |
| General Services | $5.1M |
| Library | $4.4M |
| Engineering | $4.1M |
Property tax supplies about 34% of the General Fund
Most of the $8.6B General Fund comes from a handful of taxes. Property tax alone supplies about 34%. General Fund tax revenue moves with the economy.
The largest revenue sources
$8.6B total
- Property Tax$2.9B
- Departmental Receipts$1.9B
- Business Tax$911.0M
- Utility Users Tax$772.8M
- Sales Tax$681.5M
- Hotel tax (transient occupancy)$313.5M
- Power Revenue Transfer$219.7M
- Documentary transfer tax$203.0M
- Redirection of Ex-CRA Tax Increment$155.6M
- Parking occupancy tax$151.9M
- Franchise Income$130.3M
- Parking Fines$125.6M
| Name | Value |
|---|---|
| Property Tax | $2.9B |
| Departmental Receipts | $1.9B |
| Business Tax | $911.0M |
| Utility Users Tax | $772.8M |
| Sales Tax | $681.5M |
| Hotel tax (transient occupancy) | $313.5M |
| Power Revenue Transfer | $219.7M |
| Documentary transfer tax | $203.0M |
| Redirection of Ex-CRA Tax Increment | $155.6M |
| Parking occupancy tax | $151.9M |
| Franchise Income | $130.3M |
| Parking Fines | $125.6M |
The tax forecast, and the risks the CAO names
The forecast assumes tax growth below the historical average. The CAO's transmittal letter lists economic risks that could lower revenue, and the Budget and Finance Committee's report notes that two measures proposed for the November 3, 2026 ballot could invalidate taxes that bring in more than $1 billion a year.
General Fund taxes are forecast to grow 3.3%, 0.5 points below the 3.8% historical average. The Budget and Finance Committee's report notes that two proposed November 2026 ballot measures could invalidate the City's gross-receipts business tax and documentary transfer tax, which together bring in more than $1 billion a year.
Largest increases and decreases
FY2026-27 adopted vs. prior-year budget · % change
- Other General Revenue+31.7%
- Parking Fines+15.9%
- Departmental Receipts+12.5%
- Business Tax+10.4%
- Utility Users Tax+10%
- Parking Occupancy Tax+7.5%
- Tobacco Settlement-5.6%
- Franchise Income-9.6%
- Redirection of Ex-CRA Tax Increment-9.8%
- Grant Receipts-54.9%
- Special Parking Revenue Transfer-66.7%
- Budget Stabilization Fund Transfer-100%
Ink bars show increases; oxblood bars show decreases. The two largest decreases are transfers, not taxes: the Budget Stabilization Fund draw was a one-time $29M in 2025-26, and the Special Parking transfer is below its prior $16.5M base.
- Iran war and macroeconomic volatility
- Supply-chain disruption and renewed inflation
- Rising unemployment and delayed interest-rate cuts
- A local decline in tourism
- Federal policy shifts, shutdowns, and funding cuts
Downside risks named in the CAO's transmittal letter (summarized).
Where the new revenue goes
Revenue grows $564M over the base. The CAO's balancing table starts from last year's revenue, adds required cost increases, continuing programs and the new revenue, then new services and reductions. Here is each step.
Three budgeting practices behind the headline number
All three are disclosed in the CAO's budget documents. Each concerns money treated as one-time.
Police and fire overtime, budgeted as one-time
of police and fire overtime — LAPD sworn ($74.3M) and LAFD constant staffing ($71.5M) — is treated as one-time funding: removed from the base and added back as a continuation of services, rather than carried as an ongoing cost.
One-time out, continuation in
of last year's one-time funding is removed, and $621.9M is added to continue existing programs (including the overtime above). Most of this line keeps current services running; it does not add new ones.
One-time revenue
of the proposal's new revenue is one-time. City financial policy says one-time revenue should not pay for ongoing costs; the Budget and Finance Committee noted the proposal did not comply with several of the City's financial policies.
The City Administrative Officer listed 7 areas of concern in the proposal
These are the City Administrative Officer's 7 “Areas of Concern,” from the proposed budget's cover letter: about $148M in costs or revenue the proposal did not provide for. Before adoption, the Council resolved 3 of them, worth $87.7M. $40.6M remains open. Another $20.0M depends on a street-lighting assessment that property owners have not yet approved.
- 01Debt-policy exemption for police cars$42.0M
A one-time exemption to authorize $42M in MICLA long-term debt to buy LAPD patrol vehicles — which have a useful life under six years, contrary to the City's own debt policy.
Resolved at adoptionCouncil dropped the exemption: it deleted MICLA borrowing for 300 patrol cars, cutting 2028 Games vehicle borrowing to $13.0M, and asked for lease-or-buy options by Aug 1, 2026 (Budget & Finance Committee report, recs 137 and 140).
- 02County homelessness reimbursement estimate$38.0M
The budget assumes 12 months of 2025-26 plus 9 months of 2026-27 Alliance Settlement reimbursements ($129.9M). The CAO calls two quarters ($91.86M) more realistic — so General Fund revenue may be overstated by ~$38.0M.
Resolved at adoptionCouncil cut the Alliance Settlement reimbursement estimate by $40.9M, with a $10M interim Inside Safe appropriation only if third-quarter County reimbursements arrive.
- 03Measure FF pension cost amortized$24.0M
Rather than fully funding the $24M Fire & Police Pension cost tied to Measure FF as required by ordinance, the budget proposes to amortize it over time.
Still openStill amortized rather than fully funded. The Fire and Police Pension board approved the amortization on May 7, 2026; Council added $0.2M for interest.
- 04Unfunded street-lighting obligations$20.0M
No provision for ~$12M in 2026-27 energy costs (pending a voter-approved assessment increase) plus $8M for the first year of a 10-year plan to clear outstanding back-bills.
Depends on a new assessmentEnergy costs ($10.0M) are to be funded from a new street-lighting assessment, if property owners approve it; the General Fund budget still carries no provision.
- 05Special-fund repayment shortfall$10.0M
Allocates $20M toward repaying special funds for Palisades building-project fee waivers — $10M short of the City's $30M first-year commitment under the approved three-year plan.
Still openNo Council action found in the adopted changes; the $10M shortfall against the three-year repayment plan stands.
- 06Police civilian salary underfunding$7.7M
The Police Department will likely begin the year with 2,391 civilian employees — 53 more than the 2,338 assumed — leaving civilian salaries underfunded by ~$7.7M.
Resolved at adoptionCouncil added $7.25M for LAPD civilian salaries, funded from higher State mandate-claim receipts, and trimmed the civilian hiring plan.
- 07Unfunded beach operations$6.6M
The County terminated the Joint Powers Agreement for Cabrillo and Venice beaches effective Sept 17, 2026; the budget does not include the ~$6.6M needed for lifeguarding and maintenance.
Still openNot funded. Council asked Recreation and Parks to report on Cabrillo and Venice lifeguard and maintenance services at mid-year.
Balanced this year; gaps projected for the next two
The City Administrative Officer's four-year outlook balances 2026-27, then projects General Fund shortfalls in 2027-28 (−$187M) and 2028-29 (−$39M), returning to balance in 2029-30. It assumes no new labor raises, though most sworn contracts expire this year. This is the outlook published with the proposal; the CAO has not re-issued it since adoption, and the Council's changes moved the General Fund by less than 0.1%.
Revenue and expenditure, as projected
Expenditure (oxblood) runs above revenue in 2027-28 and 2028-29, then below it.
The gap, year by year
Balanced in the budget year; the first projected gap is −$187M.
Police account for 47% of the City's unrestricted revenue
Unrestricted revenue is the money not tied by law to a grant, fee or special fund: $6.98B this year. The CAO allocates it to departments including their pension, benefit and other citywide costs, and on that basis the Police Department accounts for 46.6% and Police and Fire together 62.5% (Adopted Budget, Exhibit E).
Lower from 2021-22, rising since 2023-24
| Period | Value |
|---|---|
| 2016-17 | 53.1% |
| 2017-18 | 52.8% |
| 2018-19 | 52.3% |
| 2019-20 | 52.4% |
| 2020-21 | 52.9% |
| 2021-22 | 44.5% |
| 2022-23 | 45.5% |
| 2023-24 | 43% |
| 2024-25 | 45.9% |
| 2025-26 | 46.2% |
| 2026-27 | 46.6% |
53.1% in 2016-17, a low of 43%, and 46.6% in the adopted 2026-27 budget.
The largest departments by budget
- Police$2.1B
- Fire$939.4M
- Sanitation$452.9M
- Recreation & Parks$309.2M
- Library$279.7M
- General Services$236.2M
- Transportation$233.7M
- City Attorney$195.3M
- Street Services$193.4M
- Building & Safety$167.4M
- City Employees' Retirement$152.9M
- Engineering$128.7M
| Name | Value |
|---|---|
| Police | $2.1B |
| Fire | $939.4M |
| Sanitation | $452.9M |
| Recreation & Parks | $309.2M |
| Library | $279.7M |
| General Services | $236.2M |
| Transportation | $233.7M |
| City Attorney | $195.3M |
| Street Services | $193.4M |
| Building & Safety | $167.4M |
| City Employees' Retirement | $152.9M |
| Engineering | $128.7M |
No layoffs this year; planned street and sidewalk repair is below 2024-25 levels
The budget has no layoffs. Its service-level tables, from the proposal's supporting information, show street resurfacing, slurry sealing and sidewalk repair planned well below the City's own maintenance standards.
Street resurfacing: 500 → 120 lane-miles/yr
Against a maintenance standard of 800 lane-miles/yr. The dashed line is the target the City sets for itself.
Lane-miles resurfaced, FY2024-25 → FY2026-27
At 120 lane-miles/yr, planned resurfacing is 85% below the City's 800-mile maintenance standard.
Other service levels
Each panel tracks one core service from FY2024-25 to FY2026-27. The dashed line is the City's stated standard. The final (slate) bar is the FY2026-27 proposal.
Slurry sealing
−77%1,350 → 312 lane-miles/yr
Target: 1,200 lane-miles/yr · 74% under
Sidewalk repair
−73%220K → 60,000 sq ft/yr
Target: 150K sq ft/yr · 60% under
Crossing guards
−26%596 → 441 placements
Target: 491 placements · 10% under
Three departments — Aging, Economic & Workforce Development and Youth Development — have no budget of their own this year. Their functions moved into the Community Investment Department, whose budget rose by about 82%.
- Aging → Community Investment
- Economic & Workforce Development → Community Investment
- Youth Development → Community Investment
Liability payouts exceeded the budget for four years; the budget has since more than doubled
From 2021-22 to 2024-25 the liability claims budget stayed at $87 million while payouts rose to $281 million, with the difference covered mid-year, largely from reserves. The budget rose to $187 million in 2025-26 and is $205.4M for 2026-27.
Liability claims: what the City set aside vs. what it paid
Bars = actual payouts (oxblood where payouts exceeded the budget) · line = amount budgeted
Reserves are rising, but remain below the City's goal
Total reserves peaked at 10.05% in 2023-24. The Mayor's proposal set them at 8.40%, and the Council raised them to 8.98% in the adopted budget, below the City's 10% goal. Three rating agencies lowered the City's credit rating between April 2025 and March 2026.
Peaked in 2023-24, rising since 2024-25
After topping out at 10.05% in 2023-24, total reserves have stayed below the 10% goal. 2026-27 is the adopted budget.
| Period | Value |
|---|---|
| 2008-09 | 4.23% |
| 2009-10 | 5.55% |
| 2010-11 | 3.22% |
| 2011-12 | 4.05% |
| 2012-13 | 4.98% |
| 2013-14 | 7.06% |
| 2014-15 | 7.19% |
| 2015-16 | 7.8% |
| 2016-17 | 7.93% |
| 2017-18 | 7.09% |
| 2018-19 | 7.73% |
| 2019-20 | 8.51% |
| 2020-21 | 5.8% |
| 2021-22 | 8.57% |
| 2022-23 | 9.32% |
| 2023-24 | 10.05% |
| 2024-25 | 8.32% |
| 2025-26 | 8.85% |
| 2026-27 | 8.98% |
$224.6M spent on the January 2025 fires; $15.5M reimbursed
As of April 2026 the City had spent $224.6M responding to and repairing damage from the January 2025 fires (chiefly the Palisades fire; the Eaton fire burned County areas outside the City) and had been reimbursed $15.5M by FEMA and the State.
What the City spent — and what came back
$15.5M (6.9%) of $224.6M in wildfire costs had been reimbursed as of April 2026
Balanced for 2026-27, with gaps projected for the next two years
Los Angeles adopted a $14.9B budget for 2026-27, up 69% in a decade (about 22% after inflation). It balances with one-time revenue and overtime budgeted as one-time, leaves about $61M of the gaps the CAO flagged unfunded, and plans street and sidewalk maintenance below the City's standards. Reserves are rising but remain below the 10% goal.
Upcoming reports and dates
Mid-year budget adjustments (the Financial Status Reports) — where spending above budget, such as overtime and liability payouts, is reported, and where the CAO updates the outlook.
The November 3, 2026 ballot — two proposed measures could invalidate the business tax and the documentary transfer tax, which bring in more than $1 billion a year.
2027-28 — the first year the CAO's outlook projects a gap, and the year new police and fire contracts take effect.
The reserves and the credit rating — rating agencies have cited reserve levels in recent actions; the Reserve Fund policy floor is 5%.
Cumulative reserves are 8.98% in the adopted budget, below the City's 10% goal.
Follow the City's homelessness spending
Where the money goes once it leaves the City, and what the records show.
/lahsa-xrayLAPD, overtime, pensions, and Measure ULA, line by line
The largest cost areas, one at a time.
/deep-divesThe City’s revenue, traced back to 2012
Where General Fund revenue comes from, and how it has varied.
/revenueDownload the data
The tables behind this page, with their official source, license and column dictionary.
- 2026-27 budget: department appropriationsCSV · JSON · About the table
- 2026-27 budget: General Fund revenueCSV · JSON · About the table
- 2026-27 budget: appropriations by categoryCSV · JSON · About the table