Q and A: Here’s what you need to know about L.A.’s $1 billion budget shortfall

Los Angeles is staring down a staggering $1 billion budget shortfall for the 2025-2026 fiscal year, a financial crisis that could lead to deep service cuts, fee increases and thousands of potential layoffs.

The shortfall, driven by weakening tax revenues, rising liabilities, federal policies and the impact of the recent wildfires, has left city officials scrambling for solutions.

While the full scope of potential budget cuts remains uncertain, early proposals suggest difficult choices ahead.