SAN DIEGO (KGTV) – The City of San Diego is saying that it’s on track to cut its “historic structural budget,” according to a new Five-Year Financial Outlook report.
“In plain terms: the money the City expects to take in next year covers what we expect to spend," said the City’s Chief Financial Officer Rolando Charvel. “Because of this Administration’s fiscal discipline and tough decisions, the City will not have to start its budget process by deciding which services to cut, unlike each of the last several years.”
San Diego Mayor Todd Gloria, Charvel, and newly appointed Chief Operating Officer Bethany Bezak held a press conference announcing the new projections for the City’s budget deficit on Friday morning.
The outlook is the city’s long-range budget forecast and helps set the framework for the upcoming budgets.
The City said that after prudent financial decisions over the past several years, it will be heading into next fiscal year with a balanced budget and avoid more cuts to services and programs.
That’s according to the Five-Year Financial Outlook released Friday by the City’s Department of Finance.
The financial outlook for the City has changed over the years. In Fiscal Year 2025, the City faced a $136.8 million deficit. In Fiscal Year 2026, the City confronted a $258 million deficit. For the current fiscal year, the deficit was $88.8 million.
The City said that’s next year it’ll be zero. The Outlook
“The Outlook opens in balance with ongoing revenues projected to support ongoing expenditures,” The City said. “For the first time in years, the City's ongoing General Fund revenues are projected to cover its ongoing operating expenses without relying on one-time funding to close the gap.”
The Mayor credited the cuts and discipline that the City’s made over the years to get to this point.
“Every fall the City looks five years down the road and asks a simple question: will the money coming in cover expenses? For years, the forecast has opened with a gap. This one does not,” said Mayor Todd Gloria. “We made a lot of hard choices and asked a lot of our employees and of San Diegans. Today, I can tell San Diegans that those decisions worked. We did not paper over this problem or push it to the next administration. We fixed it.”
The City explained how it was able to get to this point and where it found the money to do so.
“The Outlook credits roughly $323 million in ongoing annual improvements to the City’s finances – all of them permanent, not one-time fixes. About $180 million in cuts over the last two years, including departmental consolidations, position reductions, and rightsizing of service levels,” the City said. “About $80 million in new annual revenue from the trash collection fee approved by San Diego voters through Measure B, which ended a century-old practice that required the City’s General Fund to subsidize trash pickup.”
The City credited roughly $63 million generated per year from Measure C and other tourism-tax revenue and opioid settlement funds.
“What we have is a balanced approach where it's roughly $180 million worth of reductions and cuts to spending along with a lesser amount in new revenue. Both of those are ongoing, which is how you get to a situation where we can say we are structurally balanced,” Gloria said. “There are other challenges. This is not mission accomplished. One of our elevators is not working today. We have plenty of examples where we could use more resources."
What this new financial outlook means for San Diegans is that the City won’t have a new round of cuts to start FY 28. But it doesn’t mean that the City has a surplus of money to spend.
“Balanced does not mean finished. We still have more infrastructure needs than resources to pay for them, and I won’t pretend otherwise," added Mayor Gloria. “But there is an enormous difference between facing that challenge from a stable foundation rather than where every conversation starts with what we have to cut.”
The Five-Year Financial Outlook is the City’s annual long-range budget forecast. It projects revenues and expenditures over the following five fiscal years and establishes the framework for the Mayor’s budget proposal, which is released in April.
Residents can read the report at https://www.sandiego.gov/finance [sandiego.gov].
