San Diego's Budget Turns a Corner — But the Foundation Has Cracks
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Mayor Todd Gloria's administration released its five-year financial outlook Friday projecting that recurring general-fund revenue will cover operating expenses in the coming fiscal year — with no one-time funds or emergency service cuts required to close the gap. Chief Financial Officer Rolando Charvel attributed the turnaround to roughly $180 million in savings from position cuts and approximately $143 million in new annual revenue, including $80 million from a residential trash fee and about $63 million from the Measure C hotel tax.
The improvement is striking in context. The city faced a $136.8 million deficit in fiscal year 2025, a staggering $258 million gap in 2026, and an $88.8 million shortfall in the current year — deficits that drove tangible cuts to libraries, parks, and road crews. Reaching a projected operating balance represents a genuine shift in trajectory.
Yet Chief Operating Officer Bethany Bezak was explicit that the operating balance leaves the city's infrastructure crisis entirely unaddressed. San Diego faces $12.8 billion in five-year infrastructure needs against roughly $5 billion expected to be available — a gap of approximately $7.8 billion. Stormwater alone accounts for 65 percent of that shortfall. Bezak said the city needs a sustainable, dedicated funding source for infrastructure. That is not the same as saying it has one.
The projection is also a forecast, not a budget. Mayor Gloria's formal proposed budget does not arrive until April, with City Council deliberations to follow and a legally required final balanced budget due by the end of June. The incoming council members in Districts 2, 4, 6, and 8 — Nicole Crosby leading in District 2, Kent Lee holding District 6 by a comfortable margin, Antonio Martinez ahead in District 8, and Martha Abraham leading incumbent Henry Foster III in District 4 — will face their first real budget cycle with an improved operating outlook and an infrastructure backlog that shows no signs of shrinking.
Measure B, the half-cent sales tax projected to generate $400 million to $450 million annually, led at roughly the same margin as Measure A through Friday's count. With both measures still in the certification pipeline, scrutiny has begun shifting to implementation — particularly how Measure B funding would be directed toward Tijuana River remediation.