Pay hikes for city workers will add $1 billion to L.A.’s yearly budget by 2028, report says

Earlier this year, Los Angeles Mayor Karen Bass negotiated a package of raises and increased benefits for tens of thousands of city workers — money aimed at addressing the rising cost of food, housing and other household expenses.

On Friday, the public got its first glimpse of the price tag for those employee contracts. City Administrative Officer Matt Szabo, in a 40-page analysis, said the planned salary agreements with the city’s civilian employee unions would add $316 million to the city budget in the next fiscal year, climbing to more than $1 billion annually by 2028.

The agreements — more than two dozen of them — are heading to the City Council for a final vote. The contracts already have been ratified by an assortment of unions representing clerks, custodians, engineers, gardeners, librarians, mechanics and many other city workers.

For most of those employees, the contracts will cover a period that includes not just the 2026 mayoral election, when Bass is expected to seek a second 4-year term, but also the staging of the Olympic Games in Los Angeles in 2028. Over that five-year time frame, the contracts are expected to add $3.5 billion in new employee costs, Szabo said.

The budget for the city’s current fiscal year is about $13 billion.

Council President Paul Krekorian, who sits with Bass on the five-member bargaining committee, said the agreements will help the city retain existing workers and recruit new ones. At the same time, he said it would be a challenge to pay workers “what they deserve” while also delivering the exact same level of services.

“I don’t think serious cuts in services will be necessary,” Krekorian said. “But I don’t want to get out in front of the budget process. Every budget process ... is filled with trade-offs.”

Asked about Szabo’s financial analysis, Bass spokesperson Zach Seidl responded: “The city can afford to pay its workers living wages.

“When we talk about responding to the homelessness crisis, filling potholes, keeping our city safe — these are not possible to do if we don’t pay our workers,” Seidl said. “And that’s why the mayor and city council are taking action to make sure these vital services continue.”

Nevertheless, one longtime City Hall watcher voiced alarm at the numbers. Jack Humphreville, who volunteers with the Neighborhood Council Budget Advocates, said he believes the projected increase in employee costs will mean “just more red ink” in the years to come.

“This is going to create deficits, which will create significantly more pressure to raise revenues, either through taxes or additional fees,” Humphreville said. “The money’s got to come from someplace.”

The contracts will cover more than 33,000 city workers, about a third of them part-time employees.

Among those in line to receive the raises are members of the Coalition of L.A. City Unions, which is made up of six unions. Those groups would receive seven raises over five years, or a total increase in pay of 24%, once compounding is factored in.

The salary agreements would lift the minimum wage of the city’s full- and part-time workers, setting it at $20 per hour this year and $25 by June 2026. Parental leave would double from six weeks to 12. Payouts for unused sick time also would become more lucrative.

Friday’s report arrived in the middle of a growing debate over city spending and what types of sacrifices will be needed to ensure that the city’s workforce is better compensated.

Szabo recently called for the elimination of 1,974 vacant positions, in large part to free up money for raises — not just for civilian city workers but also police officers.

Bass’ team has already endorsed the general concept of taking unfilled positions off the books, saying some of the jobs have been vacant for several years. City Controller Kenneth Mejia has criticized the idea, saying such cuts will threaten the quality of city services.

Appearing Thursday at a virtual town hall on the budget, Mejia said the positions should remain on the city’s books while continuing to go unfilled for now.

In recent months, Mejia has taken aim at a new package of raises awarded to the city’s police officers, also negotiated by Bass. That deal is expected to add $384 million in employee costs to the annual budget by 2027, or an additional $1 billion over a four-year span.

Chief Deputy Controller Rick Cole, a high-level aide to Mejia, said Friday that the city is on an “unsustainable fiscal course” due to increased legal payouts, overly optimistic revenue projections and increased costs created by the pay increases for police officers.

In an email, Cole declined to criticize the new round of raises for civilian workers, saying it would “not be equitable” to raise the pay of police officers and then deny other employees similar increases.

“As such, pay increases for any employee will objectively increase costs for the city,” he said. “Therefore, the city must reallocate its budget to reflect the new reality.”

The upcoming raises will be felt most keenly in the city’s general fund, which pays for basic services such as police patrols, firefighter and paramedics responses, as well as park and recreation programs.

The salary agreements are projected to boost costs in the general fund by $196 million in the upcoming budget year, which begins July 1, and by $311 million the fiscal year after that. By 2028, the additional yearly cost to the general fund is expected to reach $623 million, according to Szabo’s report.

Bass is scheduled to release her upcoming budget on April 22. In recent weeks, she has promised that she would not eliminate any vacant positions designated for police officers, firefighters, trash truck drivers or other “critical” public safety tasks.

David Green, president and executive director of Service Employees International Union Local 721, said he remains confident the city can afford the new round of pay increases. Bass and the council, he said, have already shown they are “setting budgetary goals with an eye toward the future.”

“City workers have earned their raises, and the council is right to vote for them,” he said.