A city office building in downtown San Diego. Mayor Todd Gloria said the new five-year outlook shows next year's operating budget in balance. Photo: Another Believer, CC BY-SA 4.0, via Wikimedia Commons.
Mayor Todd Gloria said Friday that the city’s next budget can be balanced without new cuts or new revenue, a first in the 20 years San Diego has published its fall financial forecast, and a sharp change from the deficits of the last three fiscal years. Speaking at City Hall, Gloria said, “In the 20 years that San Diego has published this forecast, it has never shown the coming budget year in balance without the use of one-time resources or other one-time fixes. Today, it does.” NBC 7 San Diego and ABC 10News both reported on the Five-Year Financial Outlook released that day by the Department of Finance.
The two stations gave slightly different figures for the recent shortfalls. NBC 7 said the city faced deficits of $136 million in fiscal year 2025, $258 million in fiscal year 2026 and $88 million in the current year. ABC 10News put those numbers at $136.8 million, $258 million and $88.8 million. Both said the outlook for next year opens at zero. The city, as quoted by 10News, said, “The Outlook opens in balance with ongoing revenues projected to support ongoing expenditures,” and that ongoing General Fund revenues are projected to cover ongoing operating expenses “without relying on one-time funding to close the gap.”
Chief Financial Officer Rolando Charvel told 10News, “In plain terms: the money the City expects to take in next year covers what we expect to spend.” The city credited about $323 million in ongoing annual improvements, including roughly $180 million in cuts over the last two years, 10News reported, and about $63 million a year from Measure C and other tourism-tax revenue and opioid settlement funds. Gloria described “roughly $180 million worth of reductions and cuts to spending along with a lesser amount in new revenue,” both of them ongoing. NBC 7 also pointed to the trash fee, hotel-tax revenue from Measure C, pension payments coming in lower than expected, and labor contracts in which unions agreed to no raises this year. Gloria said the council has ratified contracts “for the vast majority of city employees.”
The balanced operating picture does not touch a much larger hole. New chief operating officer Bethany Bezak told NBC 7 the city still has an $8 billion backlog of capital infrastructure work, which she distinguished from the day-to-day General Fund. Gloria said that if the city “can hold the line on this new, stronger foundation for our operating budget, we will be able to turn our attention and start methodically taking down this infrastructure deficit.” Bezak warned that restoring services cut in the lean years, including library hours, would take additional money. Gloria also said the better forecast is a projection, not a guarantee, and that “things will always come up.”
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