LAs overspending nightmare laid bare as Nithya Raman prepares to inherit budget mess

Los Angeles Mayor-elect Nithya Raman will inherit a city facing nearly $322 million in projected overspending when she takes office next month — leaving her to tackle mounting financial problems while preparing her first budget.A November 4 report from 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 report comes as LA operates on a roughly $15 billion annual budget, including an $8.6 billion general fund supporting police, fire and other city services.The Los Angeles Fire Department accounts for the largest projected overrun at $140.9 million, driven by staffing expenses, employee bonuses, wildfire-related costs and changes in deployment policies.The city’s bills are also mounting.The City Administrative Office projects $62.4 million in excess liability payouts, while the City Attorney’s Office faces another $33.8 million in overspending, largely because of litigation and outside attorneys.The City Clerk is also projecting $19.4 million in additional expenses, including election-related costs.The financial troubles stretch back several years.Under Mayor Karen Bass, Los Angeles confronted a projected $476 million budget deficit in 2024.During the 2024-25 fiscal year, revenue finished $160 million below budget, while legal liability payouts exceeded their budget by nearly $200 million.LA operates on a fiscal year running July 1 through June 30, meaning Raman will inherit a budget approved under Bass with more than six months remaining before the next fiscal year begins.Raman, who takes office on December 14, must also prepare her own spending plan.Under the existing budget process, the mayor must submit a proposed budget to City Council by April 20, giving Raman just over four months to review departmental requests and establish her priorities.City officials have identified ways to reduce current overspending....