As they prepare for the fiscal year that begins in July, San Diego city leaders are pledging to only make cuts instead of asking residents to pay higher fees.
The reason for that is twofold: First, the San Diego City Council had to go through a lot to approve new revenue sources last year, and for the money to come up short after taking such a beating from the public was demoralizing. Second, at least one councilmember said the mayor failed to execute the Council’s budget direction.
Last year’s attempt to balance the city budget with new money from Balboa Park parking fees resulted in an almost $9 million shortfall, according to the latest estimates. Other revenue sources like hotel taxes are coming in lower than expected, and some city departments overspent on overtime and salaries.
As a result, a mid-year budget report published by the city’s department of finance last month shows the city is on track to spend $16.8 million more than it is on track to collect. City leaders are legally obligated to find a way to end the current fiscal year without a deficit. At the same time, they will have to prepare a balanced budget for the coming year.
“There is no revenue that is going to come online between now and the end of this fiscal year that’s going to give us a parachute from the very hard conversations and decisions that are going to need to take place,” said Councilmember Sean Elo-Rivera in an interview with Voice of San Diego.
City leaders are already looking ahead, though.
Council President Joe LaCava admitted there’s no appetite to look for new revenue sources moving forward.
“The public is exhausted by either new revenue or increasing fees,” LaCava said. “I think the elected officials here are exhausted by that process.”
LaCava said the public should expect proposed cuts to library hours and recreation center hours. That would also include reductions in the city’s Parks and Recreation Department, and the city’s continued hiring freeze on non-essential positions.
Councilmember Henry Foster wants to revive discussions on cutting middle and upper manager positions. These include program managers, deputy directors, assistant directors, and program coordinators across different departments.
Foster told Voice that while they will focus on cuts, he wants that to be done equitably. He disagreed that there isn’t an appetite for finding new revenue.
“From my observation it’s really more so to do with the lack of confidence in the mayor’s ability to execute,” Foster said.
Councilmember Foster, who also heads the budget committee, said he wants the mayor to respect Council’s decisions on the budget.
During last year’s the budget negotiations, the mayor proposed certain cuts, but the Council rejected those. They decided to rely on optimistic projections for new revenue to keep libraries and recreation centers open.
Foster said in the last budget process, for example, the Council was specific about cutting two deputy chief operating officers. Mayor Todd Gloria decided not to cut those positions.
Councilmember Elo-Rivera said it’s important for the mayor’s proposed budget to show he’s heard the feedback of the Council and the public.
Elo-Rivera said last year’s budget was “very disconnected” from what the Council wanted. He said the mayor’s proposed budget included “across-the-board cuts” that the council had repeatedly said would be unacceptable.
“Just like any relationship, it’s really important for all parties involved to feel like they’re being heard, in order to make sure that relationship is as strong as possible,” said Elo-Rivera.
Last year, a coalition of councilmembers including Foster and Elo-Rivera blasted the mayor for striking down the Council’s “balanced and equitable” budget.
Councilmember Kent Lee said they will have to wait to see what the mayor’s proposed budget looks like, and that will determine how the Council will respond.
LaCava told Voice they’ll have a “better handle” on revenue projections related to Balboa Park and other parking fees for the next fiscal year.
“What we did last year is like – let’s do this – let’s make an educated guess about what kind of revenue it is. And across the board, it turned out to be much less, but we’re now several months in, we’re that much smarter,” he said.
Other councilmembers, like Vivian Moreno saw the writing on the wall from the start. She said she voted no on last year’s budget because of the revenue predictions that “didn’t come to fruition,” she said in an interview with Voice.
“We were stipulating that a lot of money was going to come in and as we saw, it didn’t,” she said.
Still, some Councilmembers like Elo-Rivera don’t want to close the door on potential revenue sources. He wants to look at taxing larger corporations and companies.
“In the past, budgets were balanced on the backs of communities that had the least. That makes it even more important in my mind to have those conversations about the wealthiest corporations paying their fair share,” he said.
On April 15, Mayor Gloria will publish his proposed fiscal year budget for 2027. He’ll present the budget to the full City Council on April 20.
In a statement to Voice, he said they are “far from” having a budget proposal. He said he has completed an initial round of reviews with every city department to identify potential reductions while prioritizing services.
“Last year, the City Council and I made real progress reducing the structural deficit through a combination of targeted cuts and responsible revenue steps,” he said. “That work helped stabilize our finances, but it also means more painful decisions are ahead. The choices are between bad and worse and will impact even core services like libraries and parks. I’m encouraged by the serious, good-faith collaboration I’ve had with Councilmembers who understand they, too, will have hard choices to make to keep the City on solid financial footing.”
A spokesperson for Council President LaCava said there will be two special City Council meetings on Feb. 23 and March 10 starting at 6 p.m. for the public on the budget.