LA county in turmoil after wildfires and $4bln abuse settlement
4 Min Read
Los Angeles County faces a historic budget crisis following the historic January wildfires and a $4 billion settlement over abuse claims, leaving officials to brace for decades of financial strain.
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LA County CEO Fesia Davenport appears at a press release announcing the 2025-2026 budget, April 1, 2025 (X/@LACountyCEO)
Los Angeles County is grappling with a severe financial crisis, driven by the aftermath of devastating wildfires earlier this year and a record-breaking $4 billion settlement over sexual abuse claims in juvenile detention facilities, according to County CEO Fesia Davenport.
The wildfires in January, which claimed 30 lives and destroyed nearly 17,000 structures, have left the county with an estimated $2 billion in recovery costs. On top of that, the recently announced $4 billion settlement (the largest of its kind in US history) will stretch the county’s finances for decades to come.
Additional pressures include a potential loss of hundreds of millions in federal aid and slower growth in property tax revenues.
In response, the County has proposed nearly $90 million in budget cuts. These include a 3% reduction across county departments, the elimination of over 300 vacant positions, postponed equipment purchases, trimmed supply budgets, and scaling back certain programs.
“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.”
AB 218 is a California law passed in 2019 that temporarily extended the statute of limitations for survivors of childhood sexual abuse to file civil lawsuits. This opened the door for thousands of previously time-barred cases, particularly against public institutions like schools and juvenile facilities.
Potential layoffs
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”.
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.
Today I unveiled LA County’s 2025-26 $47.9B Recommended Budget, which I’ll present to @LACountyBOS on Tuesday. We’re making cuts amid unprecedented financial challenges, but no layoffs are planned as we sustain essential safety net services: https://t.co/AYNemnql1x pic.twitter.com/68MH6YDejT
— LA County CEO (@LACountyCEO) April 15, 2025
The city of Los Angeles is also feeling the strain from the January wildfires. The city is facing a nearly $1 billion 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.
Budget cut criticisms
Last January, long-time firefighter and Los Angeles fire chief, Kristin Crowley publicly criticized the city for budget cuts that she said had made it harder for firefighters to do their jobs. “I’m not a politician, I’m a public servant. It’s my job as the fire chief for Los Angeles city fire dept to make sure our firefighters have exactly what they need to do their jobs,” she told CNN at the time.
Los Angeles Mayor Karen Bass had called for an additional $49 million reduction to the fire department’s budget just days before the devastating wildfires engulfed the city.
She had also highlighted the elimination of civilian positions and $7 million in overtime pay.
The reduction in overtime has limited the department’s ability to prepare and train for “large scale emergencies,” such as wildfires and earthquakes, Crowley had said, and programs like air operations. The department has also lost mechanics, leading to delays in repairing the vehicle fleet, she said.
She had also cast blame on the city for water running out when about 20% of the hydrants tapped to fight the Palisades fire went dry, prompting the state to change its water policies.
Other city officials said the department’s budget was later boosted, but it’s unclear how much of that went to firefighting resources.
At the time, the state held fears of potential funding cuts from the government. While former President Joe Biden quickly pledged the necessary funds before leaving office, Trump had taken a different approach, publicly criticizing California Governor Gavin Newsom and revisiting his longstanding claims about water supplies.
"I don't think we should give California anything until they let the water run down," he said, insisting on his false belief that there exists a water valve in northern California that could release billions of gallons of water.
