LINGERING BUDGET ISSUES, PANDEMIC CAUSE GLOOMY FORECAST
SAN DIEGO – As part of his pledge to be transparent and open with the public, Mayor Todd Gloria released the City of San Diego’s mid-year budget report, which reveals financial challenges due to lingering budget issues from the past administration and plummeting revenues due to the COVID-19 pandemic.
“The City faced structural budget deficits even before the pandemic wreaked havoc on our economy, leaving us with fewer resources to address our crumbling infrastructure,” Mayor Gloria said. “Repairing our City budget won’t be a quick or painless process. Our City departments are proposing reductions in the coming weeks, and I am confident that we will propose a balanced and responsible budget while doing all we can to protect core neighborhood services.”
Mayor Gloria inherited a massive budget deficit that will require making difficult decisions to preserve City services and jobs.
The City’s General Fund Revenues are projected to be under budget by $86 million at the end of fiscal year 2021 – which is $30 million higher than the entire Library Department’s operating budget for the last fiscal year. Most of the revenue shortfalls are due to the ongoing COVID-19 pandemic and the impact of the State’s stay-at-home orders on travel, special events and revenue generated from city property and facilities.
Given the dynamic economic environment and continued uncertainty facing the City this fiscal year, the Mayor is exploring various mitigation options to address the City’s budget shortfall and will communicate next steps in the coming weeks. While there is news of a Federal stimulus package on the horizon, the amounts and restrictions remain unknown and approval by Congress remains uncertain.
It is anticipated that the status and uses of any Federal or State stimulus monies will be fully known prior to the release of the Third Quarter Monitoring Report this spring. That report will include any necessary budget adjustments for the City Council’s consideration, including the use of reserves if still necessary.
Council President Dr. Jen Campbell said "This will be one of the most challenging budget cycles in San Diego’s history. While there may be tough decisions ahead, I look forward to working with the Mayor and my Council colleagues to ensure we’re protecting essential services that residents deserve."
Mayor Gloria is not recommending any actions at this time due to the uncertainty of receiving Federal or State funding, how vaccine distribution will affect the economy, and the ongoing impact of the pandemic on the City’s revenues.