Los Angeles County’s next annual budget, tentatively approved by the Board of Supervisors late in April, will be $45.4 billion for the 2024-25 fiscal year. It’s $1.4 billion smaller than last year’s final budget, but still larger than the state budgets of Kansas, Montana, and Vermont combined.
The late April approval is only one step in a months-long process to allocate funds and finalize a confoundingly complicated budget that dictates what local services and programs will be funded.
The Board of Supervisors, the county’s governing body, approved the recommended budget on April 23, moving forward with the county’s annual budget process. On May 15, the public can give input on what projects they’d like to see prioritized and concerns with the budget.
“The county budget reflects the county’s values and priorities,” said Supervisor Holly Mitchell at the Board meeting, who represents the Second District, including South LA, Inglewood, Manhattan Beach, and Carson.
The 2024-25 budget includes “major investments” in mental health services, homelessness, and advancing the Board’s “Care First, Jails Last” vision.
Where does the money come from?
LA County’s revenue comes from many different places. Some of it comes from locally generated revenue such as charging services to other governments like smaller “contract cities” that depend on the county for services like trash pickup or policing. But a lot of it comes from larger governments; namely the State of California and the Federal Government.
Of the overall $45+ billion pool, 20% of it comes from the State government and about 12% comes from the federal government. As with all money coming into the county accounts, it’s typically restricted to be used on certain programs or services the county government operates such as Medi-Cal, CalWorks, and Medicare.
“Much of this year’s budget is set for us based on designated uses for federal and state funding…,” said Fesia Davenport, Chief Executive Officer, who is responsible for managing the day-to-day operations of LA County and preparing the recommended budget. “We cannot use, for example, Medicare dollars to fill potholes in our unincorporated areas.”
Beyond money from larger governments, another quarter is from locally generated revenues, primarily from property taxes ($7.9 billion). Property taxes on land owners are determined by the County Assessor’s office, which assesses the value of a property under applicable state laws. Unlike state and federal funds, the supervisors have more flexibility in deciding how local revenue can be spent.
Eighteen percent of LA County’s overall budget is sourced from the county’s charges on other local cities for services. The county provides services such as police, fire protection, and building safety to various incorporated cities through contracts, also known as contract cities. These independent cities tend not to have big budgets to sustain their own departments and provide their residents with essential services, therefore, they leverage county resources or contracts with private organizations to provide such services. Some contract cities include Cudahy, Lakewood, Pico Rivera, and West Hollywood.
Finally, about 22% of the county’s budget is sourced from special funds and districts. Special districts are independent units established to provide a specific service; whereas, special funds finance and operate specific projects such as garbage disposal and sewer maintenance. These funds are generated from various sources such as property taxes, charging for services, and state and federal funding.
For example, LA County’s expansive network of storm drains and flood control infrastructure is largely maintained by the County’s Department of Public Works. A few years ago, voters passed Measure W, a property tax that assesses 2.5 cents per square foot of land that is impermeable to water – buildings and parking lots. The funds generated by that voter-approved tax are intended to improve our ability to capture and recycle stormwater before it gets flushed out into the Pacific.
What’s in the recommended budget?
Every annual budget passed by the LA County Board of Supervisors outlines how the county provides essential services such as hospitals and social service infrastructure for the almost 10 million people who live in LA County. It is the county’s responsibility, by state law, to ensure the health and welfare of people living in its jurisdiction.
This is evident when examining how the county spends its money. One-third of the county’s budget supports “health and sanitation” services, mostly through three departments: Health Services, Mental Health, and Public Health.
The Department of Health Services’ (DHS) $10.5 billion annual budget is the single largest of any department in the county. At its core, DHS is responsible for operating public healthcare and hospital infrastructure, including the county’s four public hospitals: LAC/USC County General, Harbor-UCLA Medical Center, Olive View Hospital, and the Martin Luther King Jr. Community Hospital. Additionally, DHS operates 24 health centers county-wide that provide primary care, urgent care, rehabilitation and emergency services. This budget includes some of the county’s highest paid employees, many being physicians.
The Department of Mental Health is allocated $3.9 billion, and the Department of Public Health is allocated $1.5 billion in the county’s 2024-25 budget.
After direct health services, “public assistance” is the second largest area of the county’s spending. The Department of Public Social Services (DPSS), the second most funded department at $6 billion per year. DPSS manages the local distribution of public benefit social programs such as food stamps through CalFresh, health insurance through Medi-Cal, and other public social programs like county general relief. Other departments under “public assistance” include aging and disabilities, children and family services, and military and veteran affairs.
“Public Protection” makes up about a quarter of the county’s budget. This includes more than $4 billion in annual spending on the LA County Sheriff’s Department, which is the fourth-largest single department in the county. Included under “public protection” is the fire department, district attorney, and probation, among others.
The remaining 12% of the budget is used on general administrative services including the Department of Public Works, which is the third most funded department at $4.08 billion. Only 2% goes to recreation and cultural services, which includes Parks and Recreation. The remaining 3% is spent on the County public library and other special programs.
The recommended budget released last week adds 835 new positions. This includes 452 positions within the Department of Mental Health to support mental health clinics, homeless outreach, and support pretrial services. In total, the 2024-25 budget allocates for a total of 116,159 positions in the country’s workforce.
The budget proposed $728.2 million (does not include $54.8 million recently received from the state) to fund LA County’s Homeless Initiative, which is responsible for coordinating programs and services to address homelessness. Funds are aimed at programs such as Pathway Home, which aims to reduce encampments, including recreational vehicles (RVs), and ultimately move people into permanent housing and provide supportive services.
Finally, the budget also includes $300.6 million— equal to 10% of ongoing locally generated unrestricted revenues— to meet the Board’s and LA County voter’s commitment to Care First, Jails Last (Measure J), which is meant to directly support investing in communities and alternatives to incarceration.
Why did it shrink, and what are the consequences?
The recommended budget for the 2024-25 fiscal year is $1.4 billion less than last year’s final budget ($46.7 billion), which was approved in October. However, this fiscal year’s recommended budget is higher than last year’s $43 billion, which was approved in April. Because the budget is a months-long process, the recommended budgets do not include additional revenue that may become available later in the year. Odds are the final budget this year will increase.
Just because more money might become available later in the year, doesn’t mean challenges aren’t expected in the future.
The county faces thousands of claims of sexual assault under AB218, the Child Victims Act, which extended its statute of limitations. County officials predict they will have to pay between $1.6 to $3 billion to resolve about 3,000 claims of sexual abuse that took place in county’s foster homes, children shelters, and probation camps dating back to the 1950s, according to the LA Times. There is no funding allocated for these cases in this budget phase but the county is exploring options for managing future costs, said Davenport at April’s meeting.
The county may also see additional costs arising from the Department of Justice settlements covering the county jails as they attempt to reduce the jail population and expand pretrial services, according to Davenport.
What’s next?
In LA County, finalizing the multi-billion dollar budget is almost a year-long process and divided into phases. The process begins in January when department heads submit their budget proposals to the LA County Chief Executive Office, which prepares the budget recommendations for the Board of Supervisors.
After hearings with the 38 county departments, the CEO submits the “recommended budget” to the Board of Supervisors for approval. The recommendations outline what programs, departments, and services they believe should be prioritized for funding. The recommended budget was unveiled to the public about 24 hours before April 13’s Board meeting where Davenport was scheduled to present it and the supervisors to vote on.
The “recommended budget” approved in April is not the final budget. A public hearing will be held on May 15 in a special Board meeting where the public will have an opportunity to voice their opinion on what they would like to see prioritized in the budget. Residents can attend in person, call in by phone, or submit materials to the Board.
The Board will deliberate and make changes to the recommended budget in June right before the fiscal year begins on July 1. The budget will then enter its “supplemental budget” phase in the summer where additional recommendations and money allocation will be made.
In October, the Board will deliberate the budget once again and vote on the “final adopted budget.” County officials will finally be able to close the books on the budget in the fall and no changes can be made to the budget.
The Chief Executive Office has a series of videos on their website explaining the budget for LA County residents.