By Macy Meinhardt, Voice & Viewpoint Staff Writer
The city of San Diego’s budget priorities for the next fiscal year are now taking shape. Topping the city council’s spending list: funding for housing assistance, homelessness, infrastructure and public safety.
Yet an imminent fiscal crisis could put these priorities at risk. In an October report, San Diego’s Independent Budget Analyst (IBA) warns that the likely failure of Measure E, which would raise the sales tax to 8.75%, along with the depletion of American Rescue Plan dollars, could trigger major budget constraints.
Measure E has yet to be called, but it is trailing by about 5,000 votes, according to the county registrar.
Already, the city is facing a $200 million budget deficit, which means ongoing costs exceed revenues.
“When those actions expire after this fiscal year, the city will lack the ongoing funds needed to support its current operations,” the IBA report states.
Measure E was estimated to generate up to $400 million annually for the city. Public safety, emergency response and neighborhood and park services are among the areas the revenue was anticipated to support.
Vulnerable communities are likely to feel the funding gaps most deeply.
Kyra Greene, Executive Board President of the Center on Policy Initiatives (CPI), has pushed for an equitable and transparent budget process in San Diego for ten years.
Last year, Mayor Todd Gloria cut many programs intended for equity in order to balance the budget. “It is a predictable pattern,” Greene says. The strains of the budget could call it into question again.
“We have to fight for a fair budget, because the status quo is to underfund,” says Greene, who works with the Community Budget Alliance on developing a “Peoples Budget” every year—a community-led proposal for how a city or county should spend its annual budget.
To try to balance the next year’s budget, San Diego is recommended to rely on state and federal grants, bond financing, and an implementation of a city-wide trash fee, according to the IBA.
The city council won’t vote on the city budget until May. However, the initial budget priorities provide a window into what city leaders value most heading into next year’s budget cycle.
“We don’t know the full financial picture going forward. This is our wish list if we could wave a magic wand and hopefully have everything we would like,” said Council member Marni Von Wilpert.
Keeping San Diegans Housed
American Rescue Plan dollars (HOME-ARP) has provided $21 million to the city to address housing and homelessness. In recent years, this went towards the development of affordable housing, shelters, and rental assistance for individuals experiencing or at-risk of becoming homelessness. With these funds now depleted, the city will have to continue to rely on state and federal grants to cover the majority of homeless funding.
All nine council members prioritized funding for the Housing Instability Prevention Program, which helps pay rent and other housing-related expenses for families at risk of homelessness. Serving 300 households, the program provides up to $750 in monthly assistance.
Four council members proposed to raise low-income housing subsidies to $1,000 and for the program to be budgeted at $5.8 million, up from $5.2 million in the year prior.
Council members also said they would prioritize the city’s Eviction Prevention Program, which provides legal representation and education to low-income renters facing an eviction.
Meanwhile, the majority of council members called for $5 million to go towards a fund to preserve existing affordable housing supply.
Seed money for the Naturally Occurring Affordable Housing Preservation Fund would also include a request to the state for a dollar-to-dollar match, and an additional $300,000 to employ a consultant to structure and manage the fund.
Over six hundred beds are expected to go offline by the end of this year. To address this, the majority of council members support expansion of shelter capacity and outreach efforts.
These efforts would address skyrocketing rents that especially impact the city’s Black residents. A 2021 Zillow report found that Black renters in San Diego are the most rent burdened and at risk of homelessness, spending more than half (almost 53%) of their income on rent.
However, the IBA has warned against adding additional funding in the new fiscal year. “Council may wish to consider refocusing its Priorities Resolution on existing city activities that are critical to maintain, rather than identifying new expenditures,” the IBA’s report states.
Local housing advocates disagree. “Homelessness is a housing problem, so the real solution to homelessness lies in providing adequate housing,” said Stephen Russel, president of the San Diego Housing Federation during a public comment session about the initial budget resolution.
Last year, San Diego dedicated $43 million towards homelessness, the city’s largest investment on the issue. Over six hundred beds are expected to go offline by the end of this year. To address this, the majority of council members support expansion of shelter capacity and outreach efforts.
The aggressive budgetary stance on homelessness underscores its severity. An estimated 11,000 individuals are currently homeless throughout San Diego, based on data from the Regional Task Force of Homelessness.
Specific funding was requested by District 4 Councilmember Henry Foster to address homelessness among Black San Diegans.
In a report analyzing homelessness disparities, the RTFH identified that Black San Diegans make up 6% of the city’s population but represent over 22% of the homeless population.
Infrastructure Deficit
The city’s deteriorating infrastructure is another top spending priority. Currently the city faces a backlog of up to $6.29 billion in needed projects, stemming from historic disinvestment and neglect in maintenance needs.
The disastrous flooding in District 4 last January underscored the urgent need to upgrade stormwater systems, particularly in underserved communities like Southeastern.
Road repair, sidewalks, bike lanes, pedestrian safety, and city facilities are also infrastructure budget priorities council members listed.
To address this growing backlog of unfunded, the IBA says that the city will need to create a holistic financing strategy, including new revenue sources, to address the growing backlog of unfunded needs, the IBA reports.
For fiscal year 2026, all arrows point to a frugal budget approach.
“There’s no doubt, no surprise, that we have collectively agreed to protect the basics, ” said District 1 Councilmember Joe LaCava.
Up next in the city’s budget development process will be the release of Mayor Todd Gloria’s five year-financial outlook on December 4. Council members will consider that report to further refine their budget priorities. That update is due in February.
To learn more about how to get involved in the city’s budget process visit: https://www.sandiego.gov/sites/default/files/2024-09/24-27-fy26-budget-development-and-fy25-budget-monitoring-key-dates.pdf
