Los Angeles Strives to Stick the Landing Ahead of 2028 Games
Event organizers and local officials work to keep the Olympics and Paralympics on budget
As Los Angeles prepares to host its third Olympics, the circumstances may feel familiar. Before the last Games there in 1984, California was balancing bullish tax revenue projections against dire fiscal signals. New technologies were on the verge of reshaping the state’s economy. And amid a shifting state-local fiscal relationship, some Los Angeles officials warned that the Olympics could strain city resources.
Despite the challenges, the 1984 Games accomplished a rare feat: turning a profit on the Summer Olympics.
Los Angeles secured its 2028 hosting bid with more than a decade of lead time, nearly twice as long as before the 1984 Olympics. In 2017, when the bid was awarded, California recorded a $9 billion fiscal surplus—almost double the Games’ entire estimated budget at the time.
Such factors should have made planning and budgeting easier. But a global pandemic, stubbornly high inflation, and catastrophic wildfires in January 2025 have complicated even the best-laid plans. The situation is not unlike Los Angeles’ first Olympics in 1932. Those Games were awarded to the city in the Roaring Twenties, only to arrive in the middle of the Great Depression.
Meanwhile, putting on the Olympics is more expensive than 40 years ago. The 2024 Summer Games in Paris cost more than seven times as much per event as the Games in Los Angeles in 1984, after adjusting for inflation. And the organizing committee, known as LA28, has updated its budget for the 2028 Games from an initial $5.3 billion to $7.3 billion, reflecting inflation, added sports, refined venue plans, and contract changes since the 2017 bid. With the city and state now facing chronic budget challenges, the odds of repeating past Olympic financial successes are getting longer.
A herculean effort
Hosting the Olympic and Paralympic Games takes a herculean effort. A nonprofit organizing committee handles the huge operational lift and finances the Games primarily through corporate sponsorships and ticket sales. The host government typically is responsible for major components, such as public safety and transportation.
The contract between the host government and the organizing committee serves as a cornerstone of Olympic planning. But numerous other public and private entities are involved, creating a web of overlapping fiscal and regulatory jurisdictions at the local, state, national, and international levels.
For the 2028 Games, the state of California has jurisdiction over everything from dedicated highway lanes to firearm regulations for shooting sports. Lawmakers tackled those issues in 2026, and there will be more to come in future legislative sessions. In October 2026, Governor Gavin Newsom (D) announced a “strike team” to coordinate state and local efforts. Meanwhile, more than 1,000 miles away, Oklahoma legislators appropriated $15 million to prepare for the Games; the state will host slalom paddle and softball events. When it comes to coordinating security across multiple federal, state, and local entities, the Games’ National Special Security Event designation puts the U.S. Secret Service in charge.
How much do the Games cost—and who pays?
Organizing committee budgets run in the billions of dollars at baseline, and costs for many aspects, such as technology and security, have risen in recent decades as the Games expanded in scope. For example, global digital sales for tickets and merchandise require advanced tech systems, while larger Games need more robust protection from physical and cyber threats. In addition, a 2001 agreement formally required host cities to stage both the Olympics and Paralympics, although many did so before the change took effect in 2008. The combined responsibility extends the Games’ duration and can increase costs and potential benefits for hosts.
Adding to the challenge, a study from the University of Oxford found that every Olympics with data available has run significantly over budget—by more than 100% on average—since 1960. According to the study, budgets developed during the bidding process typically don’t account for inflation, and organizing committees often must cover unexpected costs as they arise. While these cost overrun figures include only direct costs, experts disagree on what should be counted as such.
Accurately accounting for Games-related spending has similarly vexed government auditors. For U.S.-hosted Games, government funding at all levels has increased along with organizing committee budgets. Over time, a higher proportion of public funding has gone toward infrastructure investments compared with direct costs. Such investments have the potential for more lasting benefits, but they are also more difficult to account for, partly because some of the spending could have occurred without the Games. The convergence of accelerated timelines, lofty expectations, and fixed deadlines can help to drive costs higher.
Host governments shoulder the ultimate financial liability, whether they spend up-front on infrastructure or end up covering organizing committee costs if Games revenue falls short. As a result, both direct and indirect costs can exert pressure on a host government’s fiscal outlook.
Los Angeles goes for fiscal gold
Why would a host city take on such a complex and costly endeavor? Olympic hosts have made a similar pitch for decades: If we build it, economic growth will come. A report commissioned by LA28 estimated the Games could boost economic output in the Los Angeles region by as much as $40 billion, generating up to $2 billion in state and local tax revenue and 224,000 full-time, part-time, or temporary jobs.
But some of the temporary spending bump may displace normal economic activity, dampening the net impact. And while the region could see longer-term economic benefits, the evidence from past Games is mixed.
“Some miracles occur, but basing fiscal policy on miracles is probably not the most prudent choice,” said Alexander Budzier, an author of the Oxford study and management practice fellow at the university’s Saïd Business School.
Although no single playbook can guarantee success, dedicated revenue streams, strong oversight, and funding mechanisms that are protected from political pressures can help, Budzier told The Pew Charitable Trusts.
The city and state could still put some of these guardrails in place before 2028. But revenue-raising options are more limited, since most local tax increases require voter approval in California. And convincing residents of the policies’ long-term value could prove difficult.
Ahead of the 1984 Olympics, Los Angeles voters approved a ballot measure that both limited public expenditures and allowed for raising extra revenue. The city enacted special taxes on hotel stays and Olympic tickets that raised an estimated $17.7 million around the 1984 Games, or about $57 million in 2026 dollars.
In June 2026, city voters rejected a similar hotel tax increase that would have raised more than $40 million for the city’s general fund in 2028—effectively doubling the low estimate of the city’s tax revenue from total Olympic tourist spending under current rates. The city has considered multiple ticket tax proposals, including a broader major event tax and a 10% tax on 2028 Games tickets, but none has made it to the ballot.
Without new mechanisms to capture or direct tax revenue to the local level, the state of California will collect about 60% more Games-related tax revenue than cities and counties. A windfall could offer the state some short-term breathing room, but California’s structural pressures—such as elevated baseline expenses, reduced reserves, and high debt—will remain after the closing ceremonies.
“It’s hundreds of millions of dollars, which in the scheme of the California budget is helpful, but it’s not a panacea,” said Jason Sisney, a budget adviser to California State Assembly Speaker Robert Rivas (D) and an Olympic historian.
Racing to finish major projects
Venue construction, transportation, and security typically represent major cost drivers for hosts. To address one of these, LA28 has planned not to construct any new permanent event venues.
“The no-build philosophy takes away a huge amount of risk that other Olympic hosts have had,” Sisney said.
Still, public and private entities will spend billions getting ready for prime time. LA28 expects to spend $1.4 billion of its $7.3 billion budget on venue improvements and temporary infrastructure. Local, state, and federal governments will nearly double that, contributing at least $2.7 billion to renovate and invest in existing venues. And infrastructure spending could still rise because of inflation or unforeseen last-minute costs.
In a famously sprawling region, operations will stretch across at least a dozen city and county jurisdictions in Southern California.
“This is the unique part about having an Olympics in Los Angeles,” said Rick Cole, a former Los Angeles deputy mayor who is now a council member in Pasadena, which will host Olympic soccer at the Rose Bowl. “The venues are already built, but they’re built in a bunch of different places.”
Major projects connecting the Games to local infrastructure will cost at least another $5.6 billion, and local officials have indicated that more will be needed. The Los Angeles County Metropolitan Transportation Authority requested $379 million from the state while $875 million in federal appropriations stalled in Congress this year. The state’s fiscal year 2027 budget did not include Metro’s requested funding, and the federal bill’s future is unclear. Metro leadership warned that without federal funding by the end of 2026, the agency would not be able to meet the “tsunami” of transport demand during the Games.
Historically, much of the federal government’s direct financial support for U.S.-hosted Games went toward security and transportation. So far, Congress has appropriated $1 billion for security included in H.R. 1, 2025’s major budget reconciliation bill, and $94 million for transportation in February 2026. State and local officials have noted the key role of federal funding for the last two U.S. Games, in Atlanta and Salt Lake City—and stressed the tight timeline for 2028—as they push for more support.
Preparation for the Games has dominated Los Angeles’ infrastructure planning more broadly. In 2026, the city released its first comprehensive, multiyear capital improvement plan—a staple among most other major cities—and tied all 29 projects to the Games. The plan included more than $265 million in estimated spending. The fact that the Games spurred city leaders to move forward with longer-term infrastructure planning could bode well for future projects. However, while these infrastructure costs are not part of the formal Games budget, the same inflationary factors and fast-approaching deadlines facing LA28 could add pressure to the city’s budget.
Mounting fiscal hurdles
With costs likely to rise as the Games near, fiscal risks are concentrating around the City of Los Angeles. The city has committed billions for Games-related infrastructure investments and will likely spend hundreds of millions more on services during the Games. And if LA28’s costs are higher than expected, the city could be on the hook.
LA28’s spending and revenue projections indicate a balanced budget, with $600 million in expected contingency funds—enough to cover a relatively small cost overrun of around 10%. The organizing committee’s 2021 contract with the city requires LA28 to set aside $270 million in an allocated contingency fund, and it expects to accumulate an additional $330 million. If the $270 million fund has money left over after covering cost overruns, the remainder could be used to reimburse the city for eligible expenses under an August 2026 contract amendment. However, the unallocated contingency projections decreased by $15 million in LA28’s latest report compared to the prior year, even as total projected expenses increased by more than $100 million.
If overruns exceed LA28’s contingency funds and exhaust all other revenue, a 2017 California law authorizes up to $270 million in state funds as a “payer of last resort”—but only after the city has covered $270 million. Once the state hits its funding cap, the city is responsible for any remaining costs. And the state can provide the funds authorized in 2017 only through a separate contract, which the city and state were still negotiating earlier this year with no agreement yet announced.
Local governments such as Los Angeles have limited options when faced with such large fiscal risks. For a city already dealing with structural budget pressures and still recovering from devastating wildfires, there is little room for error.
“What do you do with the next wildfire? What do you do with the big earthquake? Suddenly you’re sitting there, and you have these commitments that will take 10, 15, 20 years to pay this all back,” Budzier said. “To deal with very large expenditures makes the system brittle and fragile.”
Final thoughts
There is a path to fiscal success for the 2028 Games, but the time to get there is limited. To live up to the Games’ promised benefits will require fiscal discipline, public support, and cooperation across local, state, and federal governments. However, Los Angeles has already taken on more financial risk than in 1984, and cost overruns could still drive expenditures higher.
No matter how the next two years play out, the impacts of the 2028 Games will be felt far from Los Angeles. With events in Oklahoma, soccer matches in five cities outside of Southern California, and a nationwide torch relay, more fiscal ripples can be expected across the country.
“It is the rare event which actually will have some sort of effect, even small, in all 50 states,” Sisney said.
Kellen Silver is a senior associate with The Pew Charitable Trusts’ Fiscal 50 project.
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