When presenting his preliminary budget of about $49 billion to his bosses, the L.A. County Board of Supervisors, Acting Chief Executive Officer Joseph Nicchitta likened it to a ship’s captain battening down the hatches before an approaching storm.
“I would say we are in the eye of a hurricane,” he said during the first of what will be several budget versions seen by the Board on Tuesday. The public will get another chance to comment on the budget on May 6. A revised version shows up before the board on June 22, with a final vote expected Sept. 29.
“We are at the starting line of a months-long budget process,” said Nicchitta, presenting his first budget now that former CEO Fesia Davenport has retired. Last year, fewer state and federal revenues and large lawsuit payouts swirling, she got all departments to cut 8.5%.
“The fiscal year 2026-2027 budget does not rely on additional cuts to county programs, services or jobs to balance this budget,” Nicchitta continued, describing a budget of $48.8 billion that is about 7% down from last year’s final budget. “This is a budget that prioritizes protecting existing services. There are no new locally funded program expansions.”
The storm coming is the federal cuts from the H.R. 1 One Big Beautiful Bill law passed in July 2025, which will cost L.A. County more than $2 billion when fully implemented in FY 2027-2028. The county is waiting for huge federal cuts in Medicaid, which takes the form of Medi-Cal in the state and its counties, to blast the county’s finances.
Those cuts will hit more than a year from now, even though some have already begun to hit county programs. The county’s Department of Health Services stands to lose about $662.2 million in federal dollars next year.
First District Supervisor and Board Chair Hilda Solis reminded the board that the Department of Public Health closed seven clinics earlier this year, with seven remaining in what is the beginning of cutbacks to county services from losses of federal healthcare dollars.
“The county does not have the capacity to fully replace the scale of those (upcoming) cuts,” she warned. Yet she wanted the county to begin efforts to try. “We must protect access to healthcare and preserve our safety net system.”
Much of the board discussion centered on goals for the 2026-27 fiscal year. Also, the supervisors noted line items cut out of Nicchitta’s preliminary budget.
Fourth District Janice Hahn asked if the program that funds meals for the low-income elderly can be put back in. She also wanted to see money flow back into a program providing addiction treatment for those in jail, called MAT: Medications for Addiction Treatment.
Nicchitta said he can talk to department heads who run that program about taking money from another funding pot and putting it back into the addiction treatment program.
In his proposed budget where spending is restrained, it only adds $63.2 million in new ongoing local funding for programs and services, a tiny fraction of nearly $50 billion.
The budget includes shoring up free and reduced food programs for low-income residents by adding $40.1 million in county dollars to protect more than 1,000 Department of Public Social Services jobs while sustaining $194 million in federal and state support for CalFresh food benefits, also cut by the federal bill.
Also, of that $63.2 million, $12 million goes to add public defenders whose workloads have become unmanageable; $9.9 million will add 44 positions to the Office of Emergency Management. The OEM was found to be understaffed by the McChrystal Group’s after-action fires review. The group’s report found alerts and evacuations were part of a “series of weaknesses” that hindered the county’s emergency-alert system, hampering timely notifications to residents during the Eaton and Palisades fires of January 2025.
The good news: Nicchitta anticipates about $2.8 billion of unspent money from last year’s budget to be used in the coming fiscal year as one-time spending for unfinished programs, including deferred capital projects, documents show.
Some of that funding goes to payouts from lawsuits, including:
• $300 million payment toward a portion of the County’s first two settlements of more than $4 billion in sexual assault claims settled from those made against county employees since the 1960s and 1970s involving children in county institutions.
• $40 million for future judgments and settlements. Last week, the county paid $8 million to settle a long-pending lawsuit by multiple sheriff’s deputies who alleged they were pressured to quit or leave the East Los Angeles station by an internal deputy clique known as the Banditos.
Costs from the January 2025 Palisades and Eaton wildfires that devastated communities along the coast and at the foot of the San Gabriel Mountains in Altadena are another priority in the budget. The county has created two infrastructure financing districts that will leverage increased property tax revenues to help support recovery in Altadena and unincorporated Santa Monica Mountains and Sunset Mesa.
The county and state are still waiting for the governor’s request of Trump for $33.9 billion to help fire survivors. About 60% to 70% are still waiting to rebuild and many are facing financial deadlines on their temporary housing. Nicchitta said the county and state continue to negotiate with “federal partners” for financial support.