In accordance with the City Charter, Mayor Todd Gloria today released a preliminary, draft City budget for Fiscal Year 2026 based on the most recently available economic data and current economic conditions. The draft proposal is balanced and reflects his administration’s continued commitment to public safety, reducing homelessness, building more housing, fixing infrastructure, and minimizing reductions to neighborhood services for residents. 

“What we are putting forward at this time is a balanced, draft budget grounded in our economic reality. It will continue to keep our neighborhoods safe, remains focused on reducing homelessness and fixing our infrastructure, and largely protects core city services that our residents count on,” said Mayor Todd Gloria. “With the economic data we have now, we’ve made strategic decisions to minimize service-level reductions, avoid mass layoffs of the workers who keep our City operating, and invest in what matters most to San Diegans.” 

In December, Mayor Gloria announced that the City would need to solve for a $258 million budget deficit in the next fiscal year amid declining growth in property, hotel room and sales taxes. This deficit subsequently grew larger from a marked dip in sales-tax revenue, lower-than-anticipated franchise fees from San Diego Gas & Electric, and an increase in employee pension costs.  

Mayor Gloria also vowed that he would tackle the City’s longstanding structural budget deficit – the historic imbalance between ongoing revenues and expected service levels that has plagued the city for decades. The draft budget released today makes significant progress toward closing the structural deficit, while ensuring residents can continue to rely on critical City services. 

”Once we realized that we couldn't count on new revenue from Measure E, Mayor Gloria had the foresight to plan for a budget year that would require us to rethink how we provide services and better recover costs in order to avoid browning out fire stations, shuttering libraries, laying off thousands of employees, and slashing services – which is the reality we were facing” said Matt Vespi, the City of San Diego’s chief financial officer. “With clear direction from the Mayor, support from the City Council, and the public, we dug in to identify every available revenue stream that could help maintain core City services – and it is making the difference in this budget.” 

The draft budget includes $157 million in new revenues that are both a rightsizing of fees for services, as well as voter-approved adjustments. This includes updating parking meter rates and parking citation penalties; modernization of various user fees and the retail cannabis tax; and two voter-approved revenue measures – one that allows the City to levy a fee to cover the cost of residential trash collection (Measure B), as well as an increase to the City’s hotel-room tax (Measure C).  

As currently drafted, the draft budget proposes the following:   

Continuing to Keep Communities Safe 

Both the Police and the Fire-Rescue Department are seeing net increases as part of the draft budget in order to keep communities safe and ensure the City of San Diego is properly staffed to respond to emergencies.

The Fire-Rescue Department’s overall budget will increase by $24 million and includes an Advanced Lifeguard Academy and restoration of the Wellness Program. Reductions include the Fast-Response Squads in San Pasqual and Engine 80 in Downtown/East Village ($1.5 million savings), bomb squad cross-staffing ($900,000 savings), and reductions in the staffing unit ($600,000 savings). These decisions avoid brownouts to fire stations, ensuring the department is still ready to respond to emergencies in neighborhoods.  

"We are proud that public safety continues to remain of the highest importance to Mayor Gloria's administration,” said Fire Chief Robert Logan II. “We will continue to work diligently during this process to ensure the final budget best supports the excellence of the San Diego Fire-Rescue Department and the communities we are honored to serve."   

The San Diego Police Department’s overall budget will increase by $29.3 million and maintains current service levels. The Department will take a minor $3 million reduction in overtime costs. 

“This budget reflects the difficult but necessary choices required to meet this unprecedented moment without compromising the key services our communities rely on,” said Police Chief Scott Wahl. ”I want to be clear: our core mission remains unchanged -- to protect and serve this city. We’re committed to doing that work by focusing our resources where they’re needed most.” 

Continuing Progress on Reducing Homelessness and Building More Housing 

The draft budget proposes a total investment in homelessness services of $105.3 million, with $71.1 million coming from the General Fund, $25.7 million from the state’s Homeless Housing Assistance and Prevention (HHAP) program, and $8.5 million in other grants, including $700,000 in Community Development Block Grant funds. 

The funding supports 17 City shelters, five Safe Parking sites and two Safe Sleeping sites and interim/bridge housing, as well as supportive services and navigation programs such as the Day Center, storage facilities and portable restrooms. Funding also will cover the City’s Coordinated Outreach, the Housing Instability Prevention Program, the Eviction Prevention Program and SDPD’s Homeless Outreach Team. 

Reductions in funding include the City’s portion of the Rosecrans bridge shelter given the County’s plans to demolish the adjacent building on the site and cut off utilities, as well as the CalTrans Outreach Program. 

Continuing Progress on Fixing Roads, Stormwater Systems, and Other Critical Infrastructure  

The draft budget proposes repairing nearly 390 lane miles of streets. This figure would cover 241.6 lane miles of slurry/cape/scrub seal maintenance resurfacing ($36.3 million) as well as full resurfacing of 147.2 lane miles ($46.8 million) for a total of $83.1 million. 

For stormwater upgrades, the draft budget proposes $48.8 million spending via the Capital Improvements budget, including $39.1 million for emergency projects and $9.7 million in flood resilience infrastructure. 

These investments are above and beyond the $733 million in planned projects being funded through the WIFIA Program, an Environmental Protection Agency loan that funds critical stormwater infrastructure upgrades. A large portion of the WIFIA funding is being devoted to projects in communities of concern to protect water quality and prevent flooding. 

Preserving Core Neighborhood Services with Mitigated Reductions 

In order to balance the draft budget and help significantly close the structural budget deficit, the following reductions have been proposed:

• All libraries will be closed on Sundays and Mondays.
• The Library Department’s “Do Your Homework at the Library” tutoring program will be reduced from being currently offered at 18 libraries to 10 libraries. The 10 locations where this program will continue to be offered are located in Council Districts 4, 8 and 9.
• All recreation center hours will be trimmed from operating 60 hours per week to 40 hours per week.
• Select restrooms in city parks will be closed on a seasonal basis.
• The City’s animal services contract with the San Diego Humane Society is being re-negotiated to lower its cost.

In all, the draft budget proposes $175.9 million in reductions across all City departments. That includes a $30.5 million reduction in personnel costs, a $46.4 million reduction in other costs, a $35 million reduction in contracts with external companies, and a savings of $64 million by delaying contributions to City reserves. 

The personnel cuts propose eliminating 393 positions, 160 of which are currently filled. The vast majority of employees in those filled positions are eligible to be transferred to other positions within the organization. 

The draft budget minimizes cuts to the departments that deliver the services that are central to Mayor Gloria’s core priorities, including public safety, road repair, and stormwater projects. 

Councilmember Stephen Whitburn of District 3 is eager for the City Council’s budget process to begin.  

"I see Mayor Gloria’s draft as a good faith attempt to respond to the concerns shared amongst our Council colleagues." He added “As elected officials we are relied upon not only to maintain the City’s duty to serve the public but also to concurrently protect the jobs of the hard-working members of the City’s workforce. The Mayor and the Executive Team made those concerns a priority. The Council looks forward to spending more time with his proposal as we begin the budget hearings In May." 

Mayor Gloria will present the draft budget to the City Council in a public hearing on Monday, April 21. The City Council, serving as the Budget Review Committee, will hold a series of hearings from May 5-9. Based on new economic information, the Mayor will release his revised, official budget proposal on May 14.