Los Angeles County is facing a significant financial challenge as it prepares for a new labor agreement with its largest union, SEIU 721. This deal is projected to cost the county over $2 billion over the next three years. Chief Executive Fesia Davenport shared this estimate with county supervisors during a meeting on Monday, highlighting the urgent need for budget adjustments in light of the county’s ongoing financial struggles.
The county’s budget, already strained by various expenses, will require further cuts to accommodate the salary increases and bonuses for county workers included in the tentative agreement. Davenport warned that departments will need to implement an additional 5.5% cut to their budgets. This comes after the county had already mandated a 3% cut across most departments earlier this year to help fund a historic $4 billion settlement related to sexual abuse claims, the largest of its kind in U.S. history.
The financial burden is compounded by the costs associated with recent wildfires, which are expected to reach $2 billion, and potential federal cuts that could further impact public health funding. The county’s budget for this year stands at approximately $49 billion, but the ongoing expenses and agreements are pushing it to the brink.
To manage the new labor costs, the county plans to allocate $778 million from its general fund, while the remaining funds will come from federal and state resources designated for staffing. The tentative agreement with SEIU 721 includes a $5,000 bonus in the first year, followed by a 2% cost-of-living adjustment and a $2,000 bonus in the second year, culminating in a 5% salary increase in the third year.
Davenport emphasized the necessity of these cuts, stating, “We are taking this extraordinary step because we simply have no alternative.” As a result of these budget constraints, the county will close two probation offices, reduce pool hours, and limit regional park access.
The supervisors expressed their concerns about the budget’s health, with Supervisor Hilda Solis describing it as a “sick patient.” Despite their approval of the budget, there was a clear sense of frustration about the financial situation. Supervisor Holly Mitchell noted community backlash against the cuts, particularly regarding park closures.
The tentative agreement still requires ratification from union members and the supervisors. The county is also in discussions with 15 smaller unions, and the estimated $2 billion cost assumes that similar pay increases will be adopted across these groups.
In the backdrop of these negotiations, the county is grappling with the broader implications of its financial decisions, as past agreements with city workers have already strained budgets, leading to layoffs and cuts in services.