Mayor Gloria Eliminates Historic General Fund Deficit, New Report Shows San Diego on Stronger Financial Footing

FOR IMMEDIATE RELEASE
Friday, November 6, 2026

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SAN DIEGO - As the result of prudent financial decisions implemented over the past several years by Mayor Todd Gloria's administration and approved by City Council, the City of San Diego will head into its next fiscal year with a balanced budget and avoid additional reductions to services and programs, according to the Five-Year Financial Outlook released today by the City's Department of Finance.

"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."

Three years ago, the financial picture for the City of San Diego looked very different. 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.

Next year, it is zero. The Outlook opens in balance with ongoing revenues projected to support ongoing expenditures. 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.

"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."

HOW THE CITY CLOSED THE GAP

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.

About $80 million in new revenue annual 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.

About $63 million annually from the Measure C hotel tax approved by voters, along with other tourism-tax revenue and opioid settlement funds.

WHAT THIS MEANS FOR RESIDENTS

The Outlook released today means the City will not need a new round of service reductions to open Fiscal Year 2028. It does not mean the City has surplus money to spend.

The Outlook projects manageable pressures in later years that the City can now reasonably plan for without having to consider drastic cuts.

Much of the City's longer-term financial pressure comes from the need to finance essential capital improvements, including aging infrastructure. Financing projects with long useful lives allows the City to spread those costs over time, but identifying sustainable funding for future infrastructure needs remains a priority.

"Balanced does not means 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."

With this more positive financial picture for the City of San Diego, Mayor Gloria will continue to hold the line on spending.

BACKGROUND

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, explore key figures at https://www.sandiego.gov/finance.

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