LA Budget Projects $321.8 Million Overspending
City Administrative Officer Matt Szabo's November 4 report projects the overspending for the fiscal year ending June 30, 2027.
Updated on Nov. 7, 2026 in Corporate Finance
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Los Angeles City Administrative Officer Matt Szabo projects $321.8 million in overspending for the fiscal year ending June 30, 2027, a 22% increase from the $263.2 million projected at the same point last year. The November 4 report puts pressure on the city's roughly $15 billion annual budget as Mayor-elect Nithya Raman prepares to take office.
Why it matters
The projected overspending lands on incoming Mayor-elect Nithya Raman, who takes office December 14 and must help shape the next budget for Los Angeles residents. The gap points to structural pressure across the Fire Department, the City Attorney's Office and liability costs, which could shape city services and spending decisions in the year ahead.
The City Administrative Officer projects $321.8 million in overspending, up 22% from $263.2 million a year earlier, against an annual budget of roughly $15 billion including an $8.6 billion general fund. Szabo identified another $131.05 million in potential solutions, leaving $183.9 million unresolved if all are implemented, and $28.8 million in pending funding requests could add costs.
The players
Matt Szabo
Szabo is the City Administrative Officer for Los Angeles, whose office oversees the city's financial administration and budget analysis.
Nithya Raman
Raman is the mayor-elect of Los Angeles and a member of the Los Angeles City Council before her election, taking office December 14.
The details
The Los Angeles Fire Department accounts for a projected $140.9 million overrun, driven by staffing expenses, employee bonuses, wildfire-related costs and changes in deployment policies. The City Attorney's Office faces $33.8 million in overspending, largely from litigation and outside attorneys, while the City Clerk projects $19.4 million in added expenses, including election-related costs.
Timeline
November 4, 2026: Szabo issues the report projecting $321.8 million in overspending.
December 14, 2026: Nithya Raman takes office as mayor.
April 20, 2027: The mayor must submit a proposed budget to City Council.
Market Dynamics
The $321.8 million projection extends the budget strain Mayor Karen Bass confronted when she faced a projected $476 million deficit in 2024. Revenue for the 2024-25 fiscal year finished $160 million below budget, suggesting the gap has persisted across administrations rather than emerging as a one-time shock.
Los Angeles residents may see the effects of the projected overspending in city services and spending priorities as the new administration prepares its budget. The Fire Department overrun and litigation costs are the most direct pressure points for city-funded services.
The takeaway
Municipal budgets can shift quickly when overtime, litigation and liability costs outpace revenue, so tracking the mayor's April proposal will show which of the unresolved gaps the city chooses to close.
What happens next
The mayor must submit a proposed budget to City Council by April 20, 2027, the next scheduled checkpoint for how the projected overspending will be addressed.
Further reading
For broader context on municipal money, see Corporate Finance coverage in Los Angeles.
Source note: This article includes information reported by New York Post.
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