Back in 2020, many people had their doubts about a proposed increase to the hotel tax, called Measure C, that promised new money to expand the Convention Center, help solve homelessness and fix city streets.
Homelessness advocate Michael McConnell was one of the skeptics. He had a criticism shared by many.
“There’s no guarantee that there will be any net increase in homelessness funding at all,” he said at a Politifest event on Measure C in 2019. “They could simply replace existing general fund money with this money.”
Political insiders were perplexed by McConnell at the time. He sold his business in La Jolla and dropped more than $370,0000 attempting to defeat the ballot measure. He sent out mailers trumpeting his personal opposition. But after the ballot measure passed and budget time came around, it turned out his predictions had been exactly right.
The new money – which the city only began collecting in 2025 because of a yearslong court battle – is replacing spending that had already been on the books rather than going toward new services.
It’s not necessarily a surprise, given the city’s budget crisis – but it is exactly what critics warned.
City spokesperson Matt Hoffman attempted to explain how the city actually had followed the will of the voters.
City leaders did expand homelessness services after voters passed Measure C in 2020 – even though the money was held up for years because of the legal battle, he said. Now that the money finally has come through, it’s simply paying for those expanded services created since 2020.
At the same time, he admitted the money isn’t going to pay for anything new right now.
“Measure C revenue is not ‘replacing’ a stable, permanent baseline budget—it is preventing a catastrophic collapse of our current shelter and service network. This dedicated revenue source is what allows the City to look forward and responsibly execute the expansion of shelter beds and interventions without shrinking our existing footprint,” Hoffman wrote in an email.
Hoffman said prior to Measure C, the city did not have a dedicated revenue source for homelessness programs, and that the city relied on the general fund and grants to fund services.
What the Measure Said Then
Here’s exactly what the measure said it would do six years ago:
“The People of the City of San Diego intend that the Additional Tax Revenues will supplement, rather than replace, any existing revenue sources (as outlined in the Fiscal Year 2016-2017 budget adopted by the San Diego City Council) to the Convention Center, Street Repairs and Homelessness Programs.”
That word “intend” is doing a lot of work. The money was intended to go to new services – but it wasn’t mandated.
Amy Li with the independent budget analyst’s office also said the voter intent was under the assumption of the 2016-2017 fiscal year budget.
She said the baseline of spending on homelessness services was very low at the time, and since then the city has significantly increased homelessness services and revenues.
Voter intention, however, was laid out with great specificity. In the first five years, 59 percent of new revenue was supposed to go toward modernization of the Convention Center and 41 percent would go toward homelessness services. Over time, money would go to road repair, as well.
But McConnell clocked this problem of intention versus requirement right away.
“I don’t want to see sections in this measure that are there that says the City Council can change how they spend that money,” he said at the time.
Measure C proponents said the ballot’s language was vague on purpose. In the same Politifest conversation with McConnell, Gil Cabrera, who was an attorney and board member of the Convention Center at the time, said the City Council needs to have the authority to do whatever it wants with the budget.
“A City Council that has control of their budget – which all of them do – can move money around in a crisis,” said Cabrera.
But Cabrera also said that city leaders should not mess around with the voters’ intent.
He said that Measure C made it politically difficult to move money around because, “somebody like you” — he pointed to McConnell – “and, me frankly, is going to scream to high heaven if the politicians move the money from what the people told them to do it, and if they do it, then you and I will be on a similar coalition to get them the hell out of office.”
Cabrera is now a federal judge. Both he and McConnell did not respond to requests for comment.
Where Measure C Money Is Going
What’s now abundantly clear is that the Measure C money won’t – and in a way can’t – help the city expand its services.
The city went into its budget negotiations this year facing a severe deficit. Even with the new Measure C money finally on the table – the city began collecting the tax in May 2025 and couldn’t start spending it until the end of 2025 – city leaders were coming up $118 million short of keeping city services running at current levels.
Rather than expanding homelessness services, homelessness spending will go down this year.
Last fiscal year, city officials allocated about $105 million in total for homelessness services and programs. This year spending will shrink to about $102 million.
Measure C is projected to bring in about $78 million this fiscal year, officials with the independent budget analyst’s office told me. Of that money, $46 million will go toward the Convention Center. Thirty-two million dollars will go toward homelessness services – but, generally speaking, it won’t be buying anything new.
The homelessness dollars will go to backfill things like shelters, safe sleeping programs, prevention programs and more.
The money for the Convention Center is paying off old debt instead of funding an expansion.
The City Council also decided to do a $6 million “fund swap” to help preserve the arts and culture budget, officials with the IBA’s office told me.
Councilmembers decided to pay $6 million in debt service for the 1998 Convention Center expansion bonds using Measure C money. That allowed them to free up the same amount that would have otherwise paid the debt service to be used to pay for the arts and culture budget.
Mayor Todd Gloria was not happy about that and said diverting funds from the Convention Center would set up the same budget challenges for next year.
The City Council could have gone further in using Measure C funds to backfill arts and culture costs, but councilmembers ultimately followed the recommendation of the IBA and chose not to do so.
Councilmember Stephen Whitburn, who has played a role in shaping the city’s homelessness policy, said the budget decisions were a result of compromise.
“The Measure C funds should be used as voters intended: as additional resources to help even more people get back on their feet. I wish every councilmember would fight for that, but budgets are always the product of compromise,” he wrote in an email statement to Voice.
“I will continue to fight in future budgets for the resources to help homelessness San Diegans get into homes.”
Councilmember Henry Foster, who chairs the budget committee, did not respond to a request for comment.
The ballot does require city officials to set up a citizens-led oversight committee with seven members appointed by the mayor and confirmed by the City Council. The Council confirmed those members on June 23.
The measure also calls for the mayor to pitch a five-year plan for how the homelessness funds should be spent.
I requested further details on the plan, but city officials were not able to provide any.
Bob McElroy, the CEO of Alpha Project, a homelessness services organization, doesn’t see the new money as a supplement to the department’s funds.
“I’m not seeing anything down the road that I foresee as being a compliment to what we have now,” he said. “From my side of the bench, I’m seeing cuts.”
