Recommended LA County budget calls for cuts amid $2B fire costs and $4B sex abuse settlement
LOS ANGELES (KABC) -- Wildfires earlier this year devastated Los Angeles County, and now, they're devastating the county budget, too.
"Our revenue outlook is challenging, to put it mildly," said Los Angeles County CEO Fesia Davenport, who gave the grim details at a news conference on Monday.
A closer look the numbers:
- Fire-related costs: About $2 billion
- Settlement of sex abuse allegations: $4 billion
The biggest hit to the county budget is a huge legal settlement of nearly 7,000 sexual assault claims. The law, known as AB 218, allows claims as far back as the 1980s for alleged child abuse incidents at the MacLaren Children's Center in El Monte, Los Padrinos in Downey, and other L.A. County-run facilities.
READ MORE: LA County reaches tentative $4B settlement involving more than 6,800 claims of child sexual abuse
"The AB 218 settlement is an unprecedented settlement. By far, the costliest in county history," Davenport said.
The county will have to use cash reserves, borrow money by issuing bonds, and cut the budget for decades to pay for settlement.
"This is not a one-year, not even a one-decade impact. We anticipate that we will be paying hundreds of millions of dollars every year until 2030, and then millions more each year through fiscal year, 2050 - (20)51," Davenport said.
She said all of this couldn't come at a worse time as the county expects revenue like property taxes to grow slowly. House sales have declined since 2020 because of higher interest rates.
The county expects the revenue impact of the fires will be $1 billion, plus another $1 billion for the recovery. Some of that could be reimbursed by the federal government, but that is years away.
"The FEMA process requires the county to front the funding first, so we call that front-funding, and then at some point, in a couple of years, we hope to receive reimbursement for expenses that are eligible for FEMA reimbursement," Davenport said.
The tentative settlement for the sex abuse cases is expected to be approved by the county's board of supervisors in the coming weeks. Davenport says she doesn't anticipate layoffs, but the county is eliminating about 310 vacant jobs, and there will be uncertainty in the budget.
