Austerity is still likely to be the general theme of San Diego Mayor Todd Gloria's State of the City Address Thursday, as the city grapples with a hastily-plugged budget deficit showing significant gaps.
In last year's address, Gloria said a looming $252.2 million deficit presented an opportunity to revisit how the city operates.
"The stark financial realities we face today will test our resolve," he said. "This is not the time for retreat. This is not the time to slow down. This is the time to double down. We are moving forward."
In a show of austerity, the address was moved from one of downtown San Diego's theaters to the Council Chambers in City Hall — a move repeated Thursday.
The mayor had then frozen non-essential hiring, paused non-essential discretionary spending and began a process with city staff of evaluating all of the city's leases with an eye of terminating or renegotiating ones that don't serve the public good.
"The task ahead ... is to right-size our city budget — not just for this year, but for the long-term," Gloria said, before referring to San Diegans at large. "We adjust, we get creative and we make the most of what we have."
In November 2024's election, voters rejected the San Diego Transaction and Use Tax, which would have increased the sales tax in the city by 1%, bringing the total sales tax to 8.75% — good for an estimated additional $400 million per year.
The current rate of 7.75% leaves the city tied for the fourth-lowest of the state's 482 municipalities and lower than nine of the county's 18 cities, according to the California Department of Tax and Fee Administration.
The lengthy budget discussions by the City Council last summer proved that cuts anywhere were roundly unpopular.
The San Diego City Council voted 7-2 to approve a $6 billion budget for the 2025-26 fiscal year, which cut library hours on Sundays but restores recreation center hours, Monday library hours at select branches and lake access.
Councilman Henry Foster III, the city council's budget committee chair, said new sources of revenue entail early debt payoffs and not filling vacant management positions, charging non-residents to park in Balboa Park and at the San Diego Zoo, allowing for digital advertising and billboards and increasing credit card fees for city business.
It is the parking where the city may have stumbled. Initially, San Diego had planned to began paid parking in September 2025. It didn't go into effect until New Year's Day and — while just 14 days into the new year may be too soon to judge the efficacy — parking lots remain wide open in Balboa Park and museums are reporting double-digit drops in attendance.
San Diego's Independent Budget Analyst Charles Modica — who is tasked with offering the city's leaders a nonpartisan take on spending — said the budget was already relying on "optimistic figures" and adding speculative sources of revenue such as the delayed Balboa Park parking would open the city up to risk and lead to later cuts or tapping into the city's reserves.
"I hope all the sources of revenue come to fruition," he said. "If they come to fruition, we have a balanced budget."
In his 2025 address, Gloria also said it was time for the city to get a fair deal from entities such as the county and Caltrans when it comes to homelessness. He said the city has for far too long shouldered the burden of homeless residents suffering from substance abuse and/or mental health issues.
According to the mayor, the city on average received 300 calls a month about homeless encampments on state-owned land near highways, leaving city officials hands' tied. He demanded Caltrans either take action or give the city authority to do so itself.
In July, Gloria and Caltrans came to an agreement to let San Diego crews take on the task of clearing homeless encampments along highways.
Gloria also reiterated his long-held position of increasing shelter beds for those experiencing homelessness.
"We will, even with our difficult financial picture, increase options for people experiencing homelessness this year," he said.
In 2025, the council approved turning a former skydiving facility in downtown into 164 units of affordable housing for those previously homeless. The city also announced the city-funded Safe Shelter for Transition-Age Youth program moved to a new site in downtown San Diego doubling its capacity to serve homeless young adults, among two examples of movies the city made on the homelessness crisis this year.
As a goal in 2025, Gloria said he would focus on increasing housing for working class people and families, including "starter-homes" like town homes, condos and row homes.
This was reflected in community plan redesigns in areas such as Claremont and the College Area greatly increasing the allowable zoning density.
