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San Diego council adopts updated FY27 budget priorities after IBA warns of $105M shortfall
Summary
The City Council unanimously approved updated FY27 budget priorities after the Office of the Independent Budget Analyst signaled a roughly $105 million baseline revenue shortfall; council preserved majority‑supported items including modest arts funding, brush management and restored auditor funding.
The San Diego City Council on Feb. 9 adopted an updated set of FY27 budget priorities and directed the Independent Budget Analyst to transmit the report to the mayor, after the analyst warned of an estimated $105,000,000 baseline revenue shortfall.
Charles Modak, the city’s independent budget analyst, told the council the update reflects both a difficult revenue outlook and a focus on maintaining core services. “The city is facing a pretty significant deficit that will need to be filled in the next year,” Modak said during the presentation.
The IBA report recommends maintaining the council’s 1¢ Transient Occupancy Tax (TOT) recommendation for arts at the previously proposed partial funding level and includes items that obtained majority council support in January memos: restoring $55,000 for the city auditor’s ongoing non‑personnel needs, increased brush management funding to reduce wildfire risk, and a set of priorities addressing recruitment and retention, unimproved streets and avoidance of across‑the‑board cuts.
During the public comment period, representatives from Arts and Culture San Diego, the Fleet Science Center and San Diego Arts Matters urged the council to preserve funding for arts and culture, arguing that arts investment supports tourism and local jobs. “Please help us stay flat this year at 4.28% so we can continue this good work,” said Christine Martinez of Arts and Culture San Diego.
Budget Committee Chair Councilmember Foster moved to accept the IBA report and told colleagues the packet reflected work to protect neighborhood services and public safety while confronting the shortfall. Councilmembers emphasized protecting frontline services such as police, fire and lifeguards and warned against relying on one‑time resources.
After discussion, the council voted 8–0 to approve the updated FY27 priorities and direct the IBA to deliver the report and each council member’s FY27 memorandum to the mayor for consideration in the FY27 proposed budget. Councilmember Campeo was recorded absent.
What happens next: the mayor will use the council’s approved priorities as guidance while preparing the proposed FY27 budget; the IBA materials and council memos will accompany that submittal.
