The San Diego City Council and its Independent Budget Analyst's office were able to largely restore funding for public priorities this year but the city still faces budget deficits now and in the future.
San Diego’s budget process for the next fiscal year is wrapping up but the latest proposal still leaves the city with a deficit that’s expected to grow.
The city faced a $118 million deficit for the fiscal year, which could be as high as $146 million when including another $26 million for legal mandates, settlements, FEMA accreditation and other fixed expenses, according to CalMatters.
That led Mayor Todd Gloria to propose cuts to nearly every department in his initial proposal. Among them were cuts to arts and culture funding and park and library hours, and eliminating the multimodal team of traffic engineers who design safe bike infrastructure.
Gloria said in a social media post about the proposed budget, “We’re staying focused on the fundamentals and prioritizing what San Diegans rely on most.”
Those priorities were, in order, fixing the roads; keeping communities safe; reducing homelessness; and building more homes.
After public outcry, the mayor’s May Revise restored some funding for recreation centers and library hours, focused on underserved council districts.
Last week city leaders announced a partnership with San Diego County and the Prebys Foundation to restore nearly all funding for arts and culture that was cut in the initial proposal.
And at Friday’s budget review committee meeting, City Council members were supportive of an idea to redirect a small amount of road repaving funds to maintain the multimodal team of traffic engineers.
The decision to cut the multimodal team was one of the most discussed topics among public comment at Friday’s meeting. At least 12 speakers asked council members to restore this funding, saying it was critical for bike and pedestrian safety.
Aria Grossman, policy manager at Circulate Planning and Policy, praised Councilmembers Joe LaCava, Stephen Whitburn and Raul Campillo for including the restoration of funds for the multimodal team in their budget priority memos.
“I think this reflects an accurate assessment of the public safety crisis that is traffic violence, and a real commitment to actually do something about it,” Grossman said.
According to Grossman, the trade-off would be 12 fewer miles of slurry seal road repairs to fully fund the multimodal team.
“I think that 12 fewer miles and new overlay is worth making the remaining over 250 miles safer as we repave,” Grossman said.
The ultimate decision on that plan will come at Tuesday’s City Council meeting. But Councilmember Henry Foster III of District 4 questioned the necessity of a dedicated bike lane team on Friday.
In regards to the multimodal team,” Foster said, “I'm not understanding how we have a transportation department, how we have transportation engineers, and yet we are reliant, totally, upon this one team, when we are obligated to design our streets to specific standards.”
“To come here and say, because we don't have a multimodal team, that we are impacting street safety, (is) totally unacceptable,” Foster continued.
Even after the recommendations from the Independent Budget Analyst office, the city still faces a $15.3 million deficit in the FY ‘27 budget that the council will have to close.
“There is still a structural budget deficit in the budget that was proposed that was not resolved in the May Revise; it is not resolved entirely in our recommendations either,” Independent Budget Analyst Charles Modica said at Friday’s meeting.
That “structural” budget deficit will grow to around $30 million next year, according to Modica, considering the loss of parking revenue at Balboa Park and reduction in trash fees for single family homes due to a city settlement reached last month.
The deficit, Modica said, “is likely to expand because you will have the additional need to further subsidize trash collection for single family homes, and you will no longer be having revenue coming in from paid parking at the park, provided that the action on Monday, is consistent with the tentative settlement agreement that was reached.”
Councilmember Sean Elo-Rivera of District 9 told KPBS last week the city needs to find more sustainable sources of revenue to avoid this same budgeting fiasco next year.
“I know that we can find the resources, and I think part of that conversation, happens in this budget cycle, and then there's a bigger, broader conversation as well about demanding that those who, who make the most here in San Diego, who take the most from San Diego, actually contribute their fair share,” Elo-Rivera said. “Because you know, they're getting wealthier and wealthier, corporations are making record profits, and at the same time, we're having conversations about which libraries we can keep open, which rec centers have to close, and whether or not we can provide any funding at all for arts and culture.”
Mayor Gloria could not be reached for comment. A city spokesperson declined to comment on the IBA recommendations, but said Gloria will work with the council on a budget “that protects core (city) services.”
“The City Charter requires the City to adopt a balanced budget, and Mayor Gloria remains committed to working with the City Council to achieve that outcome,” the spokesperson said in a statement. "We respect the budget process and are not commenting on individual IBA recommendations as deliberations continue. The Mayor looks forward to working collaboratively with Council to adopt a balanced budget that protects core services, addresses residents' priorities, and reflects the City's fiscal realities.”
The City Council is set to vote on a final budget on Tuesday. You can view the agenda and leave public comments here.
