The office of San Diego Mayor Todd Gloria has released a draft budget for the upcoming fiscal year amid regional and national uncertainty.
The budget, which can be viewed here, is characterized as a “starting point” based on the best available economic data available at the time.
A final proposal will be released in May.
The proposed budget would close libraries on Sundays and Mondays, reduce tutoring programs there, reduce recreation center hours, and renegotiate the city’s contract with the San Diego Humane Society.
On the other hand, it would increase police and fire budgets, put money toward housing crisis needs, and address stormwater systems, roads, and other ongoing infrastructure problems.
“Being this underfunded is not normal. It is not sustainable for the San Diego Public Library to continue to serve their communities at the level expected by its patrons when the city continues to slash money from the Library budget year after year,” said Patrick Stewart, chief executive officer of the Library Foundation SD.
“Looking ahead, The Library Foundation SD urges city leaders to commit to building sustainable revenue streams that will safeguard the San Diego Public Library, a cornerstone of the city’s public services. We need to build a plan that will allow all 37 library locations to be open to San Diegans seven days a week.”
“What we are putting forward at this time is a balanced, draft budget grounded in our economic reality,” said Gloria in a statement. “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.”
“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.”
The draft budget includes $157 million in new revenues, which include updating parking meter rates and parking citation penalties; modernization of various user fees and the retail cannabis tax; and trash fees and an increased hotel room tax.
It also 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 office said in a release.
In December, Gloria announced that San Diego was facing a staggering $258 million budget deficit in the next fiscal year “amid declining growth in property, hotel room and sales taxes,” a statement from his office said. The statement also cited lower-than-anticipated franchise fees from San Diego Gas & Electric, and an increase in employee pension costs.
In November’s election, voters declined the San Diego Transaction and Use Tax, which would have increased the tax on transactions in the city by 1%, bringing the total sales tax to 8.75%. The current rate of 7.75% leaves the city tied for the fourth-lowest of the state’s 482 municipalities and lower than nine of the county’s 18 cities, according to the California Department of Tax and Fee Administration.
The additional $400 million that would have been raised by the proposal was a key emphasis of the measure’s proponents, but the other side of that issue — the cuts that would need to be made if it were not passed — was less frequently referenced.
“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, 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 released Tuesday includes a “rightsizing” of fees, such as doubled parking meter rates, increased parking citation penalties and increase of various fees for services across the city. Gloria is also relying on a new fee to collect solid waste, which will be decided in June by the City Council, and on an increase to the city’s hotel tax.
That latter tax, Measure C, was approved by a simple majority of San Diego voters in 2020, but it needed two-thirds of the vote to pass. San Diego decided the two-thirds rule was unfair and has moved forward with the intent to collect the tax beginning May 1, but the issue remains tied up in court.
Gloria’s budget includes net increases for both the San Diego Police Department and Fire-Rescue Department, $29.3 million for the former and $24 million for the latter.
“We are proud that public safety continues to remain of the highest importance to Mayor Gloria’s administration,” Fire Chief Robert Logan II said. “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.”
Additionally, the budget includes 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 program, and $8.5 million in other grants.
The city will back away from the Rosecrans bridge shelter due to county plans to demolish an adjacent building and cut utilities.
“With the original [memorandum of agreement] set to expire in July, county officials had been in talks with the city to develop an updated agreement to extend the shelter’s life by an additional four years,” according to a statement from County Supervisor Terra Lawson-Remer’s office. “Despite the county’s continued interest in partnership, the city has signaled its intention to withdraw from the agreement — ending its role in operating the shelter.”
Lawson-Remer called on philanthropic donations to “support the construction of dedicated utility infrastructure,” with an estimated cost of up to $2 million for new water, sewer, fire main and electrical hookups to allow the shelter to continue to receive county-funded utilities and operate without interruption.
“I see Mayor Gloria’s draft as a good-faith attempt to respond to the concerns shared amongst our council colleagues,” Councilman Stephen Whitburn said. “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.”
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 through 9.
The mayor will then release his revised, official budget proposal on May 14.
City News Service contributed to this report.
