(SAN DIEGO, CA.) -- San Diego officials released a Fiscal Year 2027 (FY2027) draft budget that cuts services and city jobs to close a projected $118 million budget shortfall.
The $6.4 billion plan reduces staffing, scales back programs, and shortens hours at libraries and recreation centers as the city faces rising costs and uncertain funding.
Mayor Todd Gloria speaks at a press conference announcing San Diego’s Fiscal Year 2027 draft budget on April 15, 2026. Photo Credit: City of San Diego
According to a city press release issued Apr. 15, 2026, the budget cuts are meant to keep basic services running and avoid bigger cuts in the future as costs continue to rise. Mayor Todd Gloria said the plan focuses on making smaller reductions now to prevent more serious cuts later.
“This is a balanced, responsible budget that confronts a $118 million deficit directly,” Mayor Todd Gloria said in a statement. “It makes the tough decisions now—including targeted reductions to staffing and support functions—to protect the services San Diegans rely on and keep the city on solid footing.”
City officials cited rising costs, slower revenue growth, and uncertainty in state and federal funding as key reasons for the shortfall. This includes funding for housing programs, homelessness services, and infrastructure projects like road repairs and stormwater systems.
At the same time, the city is also dealing with long-term infrastructure needs- major repairs and upgrades that have been delayed for years, including roads, pipes, and drainage systems. A separate Capital Improvement Program, which outlines planned construction and repair projects, shows $12.82 billion in needed work over the next five years, but only about $5 billion in expected funding. That leaves a gap of about $7.8 billion.
Stormwater systems make up the largest portion of these unfunded projects, reflecting years of delayed maintenance.
To address the FY2027 shortfall, the city is requiring spending cuts across multiple departments. The draft budget includes workforce reductions, hiring freezes, and cuts to administrative positions in areas such as public works, parks and recreation, libraries, transportation, and city offices.
The plan also reduces library hours and recreation center hours. Some programs will be paused or scaled back, including parts of arts funding and some bike lane expansion projects.
“These decisions were made to minimize impacts on front-line services while preserving the City’s core operational capacity,” the mayor’s office said in the release.
Even with cuts, the city says it is trying to protect essential services. The budget continues funding for police and fire services, homelessness programs, and basic repairs to streets and stormwater systems. However, some positions and funding within these areas may still be reduced.
The city also plans to spend $821.7 million on capital improvement projects in FY2027.
Figure 1 and Table 2 in the city’s budget report show how spending is divided and how revenue has changed from fiscal years 2025 to 2027. Photo Credit: City of San Diego
At an Apr. 6 City Council meeting, residents raised concerns about spending priorities and service cuts. Public comment focused on funding for small businesses, and how the city is choosing where to spend money.
Wesley Clark, Director of Business Transplants at the CDC, said small business funding is important for keeping neighborhoods stable.
“This program is less than 1% of that,” Clark said, referring to the city’s deficit. “I know that cutting this won’t solve the deficit but it will impact neighborhoods just like ours.”
Michael Tremblay of the Gaslamp Water Association also supported continued funding for Business Improvement District programs.
He said the programs help “protect the revenue-producing small business base of our city.”
The draft budget is not final. It will go through City Council hearings beginning April 20, followed by additional review meetings in May before a final decision is expected in June.
Mayor Gloria said the city will continue to adjust the plan as new financial data comes in.
“If our financial position improves, we will reassess and work to restore services where we can,” the mayor’s office said. “This budget is how we stabilize now so we can move forward with strength.”
For now, the proposal focuses on cutting costs while maintaining core services as the city works to close its budget gap in FY2027.
More changes are still possible before final approval.
If you have any questions or comments, please feel free to email me at jenny.r@lead4earth.org.
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