A $662 million hole. That’s how much Los Angeles County’s Department of Health Services stands to lose in federal funding — next year alone. And according to the county’s own acting CEO, the storm hasn’t even made landfall yet.
What’s Happening
L.A. County released its first budget draft for the 2026-27 fiscal year this week, totaling $48.8 billion — a 7% drop from last year. Acting Chief Executive Officer Joseph Nicchitta presented the plan to the Board of Supervisors on April 14, describing the county as currently sitting in “the eye of a hurricane.” The budget eliminates funding for 81 vacant positions but includes no layoffs. New ongoing spending is a razor-thin $63.2 million — barely a rounding error in a nearly $50 billion budget.
The plan attempts to hold the line on essential services for the county’s 10 million residents. It adds $40.1 million to protect more than 1,000 jobs tied to CalFresh food benefits and $12 million to hire additional public defenders whose caseloads have become, by the county’s own admission, unmanageable. Another $9.9 million will add 44 positions to the Office of Emergency Management — the same office a McChrystal Group review found to be dangerously understaffed after evacuation failures during the January 2025 Eaton and Palisades wildfires.
The Bigger Picture
The budget crunch isn’t happening in a vacuum. The federal “One Big Beautiful Bill Act,” passed in July 2025, is expected to slash Medicaid funding dramatically — and those cuts haven’t fully arrived yet. When they do, L.A. County’s healthcare system, which operates four hospitals and multiple clinics serving the county’s most vulnerable residents, will absorb the brunt of the blow. Nicchitta is already signaling that next year’s budget will be far more painful. The county cut 8.5% last year and implemented a hiring freeze. That was preparation. What’s coming is the storm itself.
Real Consequences for Residents
For everyday Angelenos, the numbers translate into real-world pressure. Tens of thousands of fire survivors — 60% to 70% of those displaced by the Palisades and Eaton fires — are still waiting to rebuild, facing financial deadlines on temporary housing while a $33.9 billion federal disaster aid request from the governor remains unresolved. The county is also setting aside $300 million toward a $4 billion sexual abuse settlement covering claims made against county employees dating back to the 1960s. And $26.7 million is earmarked for mental health and substance abuse treatment as alternatives to incarceration — a program whose long-term effectiveness will depend on whether the broader safety net holds together at all. Public hearings on the recommended budget begin May 6, with final adoption scheduled for September.
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