A declaration of fiscal emergency allows the city to act without the approval of employee unions. The mayor told the city council Tuesday that Los Angeles could run out of money between November and February.
Villaraigosa told the council the city faces a $529 million deficit in the budget year beginning July 1. He added that the budget gap could balloon to $1 billion in the following fiscal year.
Under a fiscal emergency, the city could demand employees take 26 days of unpaid leave. Police and firefighters are exempt.
A spokesperson for the Coalition of L.A. City Unions, which represents 22,000 city employees, says the council should "question the integrity" of the emergency declaration.
The mayor's $7 billion proposed budget relies heavily on renegotiating employee contracts and privatizing other city services.
The Los Angeles budget must be adopted by June 12.