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San Diego finance officials flag $22.9 million projected FY26 shortfall; five‑year outlook shows larger structural gaps
Summary
City of San Diego finance staff told the council their FY26 first-quarter monitoring report projects a $22.9 million general fund shortfall, driven by weaker TOT, sales tax and parking revenues plus higher public‑safety overtime; the five‑year outlook warns growing structural deficits that will require midyear mitigations or long‑term reductions.
City finance officials on Monday told the San Diego City Council that their first‑quarter monitoring report projects a net $22.9 million shortfall to the general fund for fiscal year 2026, and a separate five‑year financial outlook shows growing structural gaps that will require mitigation.
Ben Battaglia, the city’s director of finance, said the first‑quarter report is limited in scope but outlines several revenue and expenditure trends that together create the projected near‑term shortfall. “This report was developed in coordination with departments and utilizes data available during the first three months of the fiscal year,” Battaglia said during the presentation. He and staff cited a decline in transient occupancy tax (TOT) and sales tax as primary drivers of the revenue shortfall.
The Department of Finance estimated major general fund revenues would be about $1.8 million below budget at the time of the report and cited a larger…
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