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City projects $258M FY26 shortfall; officials urge immediate revenue steps and cuts
Summary
The Department of Finance and IBA presented a five‑year outlook showing a baseline FY26 structural shortfall of about $258 million and an expanded shortfall near $329 million when planned commitments are included; officials urged near-term mitigations including parking meter and trash fees and targeted cuts.
San Diego officials told the City Council on Jan. 14 that the city faces a structural general‑fund shortfall of roughly $258 million in fiscal year 2026, driven by rising employee compensation, pension payments, homelessness spending and nondiscretionary costs such as insurance and deferred infrastructure needs.
Fiscal officers explained baseline assumptions and stressed that FY25 was balanced in large part by one‑time resources that are no longer available. Department of Finance staff said the city could close some of the gap with one‑time options and policy changes but warned that even after a set of mitigations the city likely faces an ongoing…
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