L.A. County Expects $2 Billion in Fire Costs, Adding to Budget Woes

U.S.|L.A. County Expects $2 Billion in Fire Costs, Adding to Budget Woes

Los Angeles County is facing a mounting financial crisis, its top manager said on Monday, as expected cuts in federal funding, a record $4 billion settlement for sex-abuse allegations and the destructive wildfires in January threaten Southern California’s economy.

Fire-related costs are expected to approach $2 billion, Fesia Davenport, the county’s chief executive, said at a news briefing. The figure includes about $500 million in immediate costs plus lost revenue and recovery spending, and illustrates the lingering toll of the wildfires that began on Jan. 7, killing 30 people and destroying thousands of homes.

One fire all but leveled the Pacific Palisades neighborhood in the City of Los Angeles’s jurisdiction, and another destroyed much of Altadena, also in the county’s jurisdiction. Last month, city officials projected a $1 billion budget shortfall for next year that stemmed from fire costs, legal liabilities and federal policy disruptions. City leaders said they were weighing steep budget cuts and possible layoffs.

Los Angeles County is bigger than some states, with a population of nearly 10 million and more than 100,000 mostly unionized public employees. Ms. Davenport said that layoffs of county workers were so far unlikely, but that the region’s financial challenges had rapidly intensified.

“The closest thing I can think of is Covid,” she told reporters, comparing the current budget woes to the coronavirus pandemic, which continues to impact the regional economy.

Besides the costs of the wildfires, she said, the county also stood to lose hundreds of millions of dollars or more in federal funds from policy changes in the Trump administration.