LOS ANGELES — Call it the Karen Bass special: a shot of optimism, followed by a bitter budget chaser. You could see this coming if you live in Los Angeles.

The Pacific Palisades (a district in the city) fire showed how the city was unprepared. There was a shortage of manpower. There was a shortage of functioning firefighting equipment. There was a lack of water pressure. There was a nearby reservoir that was empty due to a damaged lid.

That was the incongruous combination the Los Angeles mayor debuted on Monday, when she presented an upbeat outlook in her annual State of the City address, only to drop a gloomy spending proposal that could result in 1,600 layoffs.

The bracing split-screen is a result of the city’s cascade of disasters: historically devastating wildfires, a perennial homelessness crisis and a bleak budget outlook made worse by global economic upheaval. It lays bare the daunting climb awaiting Bass, whose flat-footed initial fire response has left her more politically vulnerable than ever as she seeks reelection in 2026.

Throughout her midday speech, Bass recounted Los Angeles’ woes in her typically sunny cadence, presenting the challenges as an opportunity to further transform the nation’s second-largest city.

“The state of our city is this: Homelessness is down, crime is down. These are tough challenges and they show that we can do so much more,” Bass said. “We still have a long way to go. We need a citywide turnaround, and we need a fundamental overhaul of city government to deliver the clean, safe and orderly neighborhoods that Angelenos deserve — and to reverse decades of failure on homelessness. ”When it came to the city’s fiscal crisis, though, Bass kept it simple and blunt: “Los Angeles, we have a very difficult budget to balance.”

That acknowledgement kicked off in earnest crunch time in charting the city’s coming fiscal year. On Monday, the deadline for Bass to unveil her budget proposal, the mayor released a $13.95 billion spending plan.

The proposal closed the nearly $1 billion deficit that Bass and city leaders had telegraphed in previous weeks. To do so, it proposes 1,600 layoffs, a move the mayor said was a “decision of absolute last resort.”

The layoffs would represent nearly 5 percent of the 32,405 positions currently filled in the city’s workforce.

City officials, who were granted anonymity to speak before the details of the budget were released publicly, said no sworn officers from the police or fire departments would lose their jobs and that Bass will seek to avoid layoffs through negotiations with labor unions.

“We’re also hoping to get some support from state government in order to mitigate or minimize the impact of layoffs on the budget,” one official said. Bass will be traveling to Sacramento later this week to make her case.

Bass is also proposing to find savings by eliminating several commissions, including an advisory Health Commission and another for Climate Emergency Mobilization; consolidating city departments for aging, economic and workforce development and youth development into one department; and delaying certain capital projects.

The city’s financial woes predate the recent turmoil in global markets. Liability payments have tripled, and revenues from business, sales and hotel taxes have lagged.

Bass, speaking of the fiscal crisis, called for “fundamental change” in the city’s operations and endorsed reforms such as multi-year budgeting and a capital improvement plan. She also restated her commitment to reform the city’s charter — an effort that caught momentum after a series of scandals in City Hall but had stalled after the mayor failed to appoint members to a commission to tackle the issue. Bass said she would soon announce an executive director for the commission and name her appointees, with the goal of getting the panel going by the end of the month.

Elsewhere in the speech, the mayor walked a finely calibrated line between boosterism and realism. She extolled the recovery from January’s Palisades fire as “the fastest in California history,” while acknowledging the impatience of fire victims for rebuilding to happen at a quicker clip.

“For those who have lost a home, each and every day is a day too long,” Bass said. “We want to be fast, we want to be safe and we want to be resilient.” She announced a trio of additional efforts on Monday to streamline the rebuilding process, including calling on city council to back a measure to waive all plan check and permit fees.

Elsewhere, there were glimpses of the speech she would be giving if not for the fires’ destruction, as she touted double-digit percentage drops in crime and homelessness — two issues that Bass had invested significant political capital in tackling during her initial years in office.

She acknowledged that Inside Safe, her signature program to move people out of street encampments and into motel rooms and other interim shelter, was not financially sustainable. But she had a pointed message for critics who said that she was spending too much on her priority cause.

“For me, housing these folks, saving lives and ending encampments that have been there for years and years — that is worth the cost,” she said. “Because the cost of leaving an encampment on the street impacts everyone around … It is clear that the cost of doing nothing is not just inhumane, it is also financially unsustainable.”

After roughly an hour of recounting the uphill climb that her city faces, Bass ended her speech playing the role of booster-in-chief, insisting that even a town as beset by obstacles in Los Angeles could, in just three years, be in the international limelight as the host the Summer Olympics.

“The games at its best are more than sport,” she said. “They are a stage for courage, for potential, for dreams. So, LA — let’s go win.”