Los Angeles City Controller Kenneth Mejia reiterated his warning Friday that the city needs $225 million to avoid layoffs in Mayor Karen Bass‘ proposed budget for the 2025-26 fiscal year, which aims to close a nearly $1 billion deficit.

“It’s about $225 million to stave off layoffs. That is the number that we’re trying to (get) close to, so that way there are no layoffs,” Mejia told City News Service Friday. “It’s going to be a big task, but the city is looking into different ways.”

The City Council‘s five-member Budget and Finance Committee has led discussions of the mayor’s $13.9 billion budget, which would be an 8.2% increase over the adopted spending plan for the 2024-25 fiscal year. More budget hearings are scheduled as elected officials review the budget. Under the City Charter, the budget must be finalized before July 1, the start of the next fiscal year.

As part of solutions to offset the deficit, Mejia said his office is trying to save money when it comes to interest payments.

According to the controller, Los Angeles pays about $70 million to $80 million annually in interest on borrowed funds — a cost he suggests could be lowered by tapping into departmental special funds as needed instead.

He also backed a proposal to move some at-risk employees into the city’s proprietary departments, such as Los Angeles World Airports, the Department of Water and Power and the Harbor Department, which oversees the Port of Los Angeles.

Mejia said he was encouraged by the committee’s efforts to address L.A.’s shortfall, adding the city is in “crisis mode.” He said it is “really important that they do that detail work.”

Mejia also encouraged his colleagues to save “revenue generating positions,” depending on the department’s analysis. In one area, the controller’s office recommended more tax compliance officers because there are a lot of outstanding payments the city can try to get back.

“For the long run, the city needs to be more honest and transparent about how we got here, about the budget process — keep getting people more involved and really look at line-by-line where we are spending over budget,” Mejia said.

On Tuesday, City Administrative Officer Matt Szabo discussed the proposed layoffs, which were described as a last resort. In total, the mayor has proposed cutting more than 2,700 city positions; 1,647 would be layoffs and the remaining 1,076 are vacant positions. Layoffs would impact about 5% of the city’s workforce.

Those savings in a full year would be about $225 million. Szabo said four months of funding exists for all filled position cuts, and the budget assumes eight months of savings of about $150 million.

Szabo noted the budget would bring the city to 32,342 authorized positions, bringing that figure to its lowest level since the Great Recession in the 2014-15 fiscal year.

The CAO recommended other measures to stave off layoffs such as deferring raises, swapping positions so work would be funded through special funds rather than general funds, transfers to proprietary departments and reassignments.

City officials are working to prevent layoffs by engaging in labor negotiations, and asking for aid from the state government, among other things.

Los Angeles is facing the nearly $1 billion shortfall in the 2025-26 fiscal year as a result of lower-than-anticipated tax revenue, labor contracts, rising liability payouts, costs related to fire recovery and issues related to a weakening economy as a result of federal policies.

An official from Service Employees International Union Local 721, which represents more than 10,000 city workers, did not immediately respond to a request for comment Friday.

David Green, president of the union, previously said the city should look at every dollar, and layoffs should not be the first option.

“We will continue to work with the city to find innovative solutions to the crisis, including identifying new revenue streams, alternate funding sources and wasteful spending on outside contractors that gobble up city funds,” Green said.

“SEIU 721 members are united and ready to overcome this challenge and, just like in the past, it will be our decisions that save the city — not the short-sighted whims of administrators in City Hall,” he added.