The plan increases funding for homelessness programs, police hiring and infrastructure projects while relying on projected tax revenue growth
Mayor Karen Bass’s new $14.85 billion budget for the 2026-2027 fiscal year has been announced, funded by an estimated increase in revenue from property, business, sales and utility taxes.
According to Chief Administrative Officer Matt Szabo, the city’s budget was calculated on “conservative assumptions,” but estimates $412 million in increased revenue due to the upcoming 2026 World Cup, partially hosted in Los Angeles. The mayor’s office predicts approximately a 4% increase in revenue from property tax, as well as a 5% increase from sales tax and nearly 9% growth from business tax.
The budget’s main initiatives center on reducing homelessness, increasing public safety and improving city infrastructure.
“The budget I’m releasing today is organized around continuing to change LA and move it forward because I will absolutely not go back to the broken systems of the past,” Bass said Monday in a State of the City address.
Bass’ Inside Safe program, which has been criticized for its effectiveness and high costs, is set to receive additional funding. According to the mayor, homelessness in Los Angeles has decreased 18%, while increasing across the country at the same rate.
Funding will also be provided to address RV encampments, as well as to ensure oversight and transparency in the city’s efforts – another concern that has been raised about Inside Safe after audits found the Los Angeles Homeless Services Authority mismanaged millions of dollars in contracts.
The mayor’s budget seeks to strengthen public safety by hiring 510 new officers for the Los Angeles Police Department and increasing patrols in downtown Los Angeles. The officers will be trained in “use-of-force, de-escalation and mental health intervention,” according to the mayor’s office.
Firefighter staffing levels at the Los Angeles Fire Department will remain the same until at least November.
Scroll to continue reading
In her address, Bass said she is committed to prioritizing de-escalation and mental health intervention, along with the increased patrols.
“If we can finally address the mental health piece, then maybe we wouldn’t have so many liabilities,” Bass said. “I do think help is on the way there, because we’re gonna see mental health facilities opening up around our city.”
Additionally, repairs will increase throughout the city in preparation for the 2028 Summer Olympic Games. The budget accounts for street and sidewalk repair, along with funding for a recently launched Street Lights Initiative that will repair and replace 60,000 streetlights by 2028.
We’re making history and paving a path toward a brighter Los Angeles by installing 60,000 street lights citywide. pic.twitter.com/kAQY2xHP0g
— Mayor Karen Bass (@MayorOfLA) March 27, 2026
“The investments that we are making are in the city’s infrastructure in preparation for the games,” Deputy Mayor of Finance, Operations and Innovation Matt Hale said. “We’re trying to use this as a catalyst to have life better here around the Games.”
The new city budget relies heavily on tax revenue, which is estimated to increase in the following year. However, the Los Angeles City Council voted unanimously on April 15 to authorize an economic study of a ballot initiative that aims to repeal the city’s business gross receipts tax.
The council has 30 days from the time of the vote to determine whether to put the initiative before voters — through either a special election or placing it on the November ballot — or adopt it outright.
Szabo said his office prepared an estimate of an $895 million loss in revenue if the initiative were to pass, which is more than 10% of the city’s budget. Maintaining city services, specifically public safety, would become impossible if business tax revenue were lost, according to Szabo.
“Which is why that can’t pass,” Bass said. “Which is why we don’t want to have that.”
The full budget breakdown can be found on the City Administrator’s Office website.