The Giant Meteor Heading Toward the City of San Diego’s Budget

Forget the current budget deficit.  

If voters repeal San Diego’s trash fee, city leaders say their only option would be to cut up to $150 million from city services like stormwater, fire and police departments. 

“Outside of new revenue coming in, there’s no other option,” said Charles Modica, the city’s Independent Budget Analyst. 

A business advocacy group is pitching a ballot measure that would remove the fee for fiscal years 2028 and 2029. They need 21,000 signatures to get the repeal on the November 2026 ballot – far fewer than other signature-gathering efforts. 

“The effort is off to a fantastic start,” said former Mayor Kevin Faulconer, who is leading the repeal on behalf of the Lincoln Club Business League. He didn’t say how many signatures the group has gathered. 

While the former mayor says the city needs to repeal the fee and scale back its spending, Mayor Todd Gloria and other city leaders say the repeal could result in a big blow to the city’s budget. 

“The magnitude of those cuts is going to be significant,” said Modica. 

Modica said the money generated from the trash fee is about 5 percent of the city’s budget.  That is more than what the city spends on the library system in a year, and about what it spends on its network of sidewalks and streetlight, he said.  

“The city would need to really have a real conversation about just picking a service that it is currently providing and not providing that service anymore,” Modica said. 

Since 1919, a law known as the People’s Ordinance required the city to collect trash, without charge, from any home with direct access to city streets. The city paid for trash pick up out of its general fund. 

In 1981 and 1986, voters amended the People’s Ordinance to prevent city officials from ever charging fees for city trash collection. In 1981, voters declared that residential trash collection would remain free, although there could be a fee for industrial and commercial waste. In 1986, voters approved an amendment that would require residents who live on private streets or multi-family homes like apartments to pay private haulers to collect their trash.  

Single-family homeowners with access to city streets continued to get trash picked up without paying a fee. 

In 2022, voters narrowly approved Measure B, a new amendment to the People’s Ordinance that allowed the city to start recovering costs.  

The amendment also clarified which properties are eligible to receive city-provided services. This includes properties on public streets that are not mixed-use or commercial. City workers will also only pick up trash at lots with one to four residences maximum.  

City officials estimated the fee would be between $23-$29 per month per customer when they put Measure B on the ballot. But a cost study later revealed that the fee needed to be higher, so the City Council opted for a much higher fee of $43.60 last summer. 

The full cost for the year turned out to be between $32.82 and $43.60. The fee also increases each year. When people got their tax bills, they were furious.  

A group of homeowners sued the city, alleging officials are charging more than what it costs to pick up trash. A judge recently denied the city’s request to dismiss the lawsuit.  

“The ability to charge for trash barely passed at the ballot box,” said Faulconer. “If the city would’ve told people it was going to be double what they said it was going to be, it wouldn’t have passed. That’s, again, why people are angry and rightfully so over a bait and switch.” 

At least one councilmember, also agrees that the City Council should have never doubled the fee. Henry Foster – along with Councilmembers Raul Campillo and Marni von Wilpert – voted no on the fee last June.  

In a recent candidate forum, Foster said he would like to lower it to the estimate the city offered voters when Measure B passed. 

“We need to right our wrongs. We need to take care of our structural deficit, but we need to take the trash down to $29 — no more,” said Foster. 

Modica said two factors increased the fee.  

First, the Environmental Services Department had historically estimated its customer base was much larger. The department thought it served around 285,000 addresses. Since the department didn’t bill households, it didn’t keep track of which households it served. 

A cost-of-service study by the Environmental Services Department in 2022 revealed it served a little over 222,000 addresses. Essentially, there would be fewer families paying the fee and yet the cost of providing the service was going to increase.   

“The denominator by which you would divide the total costs of our things was smaller, which results in a higher fee,” said Modica.  

Just on that point alone, the city would have needed to increase the cost from $29 to $37 per month to recover all of its costs, a report by Modica’s office found last year.  

Modica said the fee also increased because costs are increasing across the board. Vehicles cost more. So does their maintenance. City workers’ pay has also gone up.  

When Measure B first passed, the baseline operating cost for trash collection was about $98.3 million. That number increased to more than $120 million this fiscal year.  

This year, the fee has generated approximately $117 million. The Environmental Services Department estimates the fee will generate approximately $123.9 million next year, which is about $9 million less than officials expected.  

Jordan More with the independent budget analyst office said that’s because some people are returning their additional bins or opting for cheaper bins.  

Homeowners can choose from a wide range of trash bins. The cheapest option is $32.82 a month for a 35-gallon trash bin. The most expensive option is $43.60, which gets you a 95-gallon trash bin. All the options come with bins for recycling and organic waste. 

The money from the fee goes into something called the solid waste management fund. Dollars that go into this fund can only be used to pay for waste management related activities. This essentially frees up money in the general fund to be spent on other city services.  

That could all change soon with the repeal effort.  

Faulconer said he isn’t concerned about the hit to the general fund.  

“This city survived for a hundred years without having to charge people for trash or having to charge families to go to Balboa Park. It’s about priorities,” he said. He also said city officials can invest in public safety and employees “without having to fee and tax San Diegans to death.” 

City officials need to cut back their spending, and focus on reducing middle managers, or unclassified employees at the city, Faulconer said.  

Mayor Gloria, however, is very concerned.  

“Eliminating the solid waste collection fee or further reducing parking revenue will come at the expense of the general fund,” he said. “The sum total of those two things combined exceed the deficit that we’re closing right now. Basically, you would double the challenge we are currently grappling with. It is real. Where would that come from? Well suddenly we’d be right back to where we are today. Where things we are currently doing our best to protect, specifically public safety, police and fire, would have to be up for deeper reductions.”