Mayor Todd Gloria recently noted that back in January he warned San Diegans, both in what he said and symbolically, that austere times were ahead.
“That’s precisely where we are,” he said last week, reflecting on his State of the City speech given in the City Council chambers, eschewing more ornate locales often used in the past.
The day after presenting his revised budget that seeks to close — for now — a $350 million shortfall, the mayor sat down for a wide-ranging interview that touched on reducing spending, efforts to increase revenue, the push for more housing, federal cuts and how the confluence of faraway events affects San Diego.
The budget, among other things, relies on a partial hiring freeze and reduced library and recreation center hours while prioritizing police operations — and the cuts have received widespread attention. SFGate, a Bay area news website, even did a story on Gloria’s plans to close numerous restrooms at beaches and parks.
Road repair funding would be reduced, though a report last year said San Diego streets have deteriorated significantly.
Some of that has been met with criticism that lower-income and underserved areas will be hurt the most by the cuts.
Nevertheless, Gloria had a hopeful, if not optimistic outlook, about things stabilizing in the future, even while acknowledging matters could get worse before they get better. He noted San Diego is not alone and that the state and other cities are grappling with budget shortfalls.
Here are some of the areas he touched on during the interview.
Budget cuts. This has been a major topic at City Hall and beyond for weeks.
“I’d like to say it’s better, but the cuts are half of what they could have been. I’m still not happy about it,” he said.
At this stage, the budget likely will have to tap the city’s currently underfunded reserve for $10 million — something that hasn’t happened in a decade. Gloria said he’d rather not do that, but wasn’t overly concerned about that amount in a multibillion-dollar budget.
As for the potential of the council leaning more on the reserve to restore programs, he said “that should not be done.”
He pointed out that San Diego’s credit rating was upgraded last year and predicted the budget difficulties wouldn’t change that.
Revenues. Various tax sources of the city’s income were down, some surprisingly so, as reported by David Garrick of The San Diego Union-Tribune.
Gloria pointed out that some of that was offset by $150 million from higher taxes on hotel rooms and cannabis shops along with a boost in parking-meter fees.
Despite narrow voter rejection of a sales tax increase in November, the mayor said eventually the public will need to pay more to help resolve municipal problems, particularly the multibillion-dollar shortfall in infrastructure funding.
“We’ll get there eventually,” he said. “New revenue is going to be the way we have to do it. People say, ‘Can’t you can belt-tighten your way to new infrastructure?’ But that’s $10 billion-plus dollars… ”
Trash fee. The city plan to begin charging single-family homeowners for trash pickup is a big component of the budget-balancing act, but it remains mired in controversy and uncertainty.
Voters approved a ballot measure clearing the way for the fee when the estimated cost was between $23 and $29 a month. After the 2022 vote, the estimate ballooned to $53, with future increases, but was then lowered to $47.59 per month.
Gloria noted the Independent Budget Analyst’s office, which is not under the control of the mayor, “owned up” to its mistake in the original estimate. As for the current estimate, he said, “I suspect it will be further reduced.”
If so, he cautioned that service may be less than what people expect. “You get what you pay for,” he said.
Housing. The City Council is moving to amend the city’s backyard apartment rules to prohibit rare oversized projects and require infrastructure fees. Gloria has acknowledged some changes should be made, as long as it doesn’t lead to a broad retreat from San Diego’s pro-housing policies.
“I’m hopeful this is not a shift in the pendulum,” he said.
He noted that an apartment construction boom in the region has flattened and even lowered rents in some areas, as reported by Phillip Molnar of the Union-Tribune.
He also said the results from the annual point-in-time homeless count in January will show a substantial reduction within the city limits — it has been on the rise for years — though he did not provide details.
Federal cuts. “I don’t like what I see,” Gloria said about the Trump istration’s plans for sweeping cuts to health care, housing and homelessness programs and more. But he had a glimmer of hope.
Gloria said he was just back in Washington, D.C., and saw the concern was bipartisan.
“Even Republican of Congress are trying to figure it out,” the Democratic mayor said.
“Hopefully, the economy will settle down, the federal government will figure out a new equilibrium with the change in istration and then we’ll be able to perform in a more stable way.”
Tariffs. He said President Donald Trump’s increased tariffs are affecting city finances like — potentially — everyone else.
He stressed, however, the increased levies on foreign goods were not responsible for the depth of the city’s budget problems, some of which have been self-inflicted through San Diego’s yearslong practice of spending more money than it takes in, expensive real estate deals that went awry and an electorate reluctant to raise taxes.
Still, he gave a small example of how this shift in international trade can make budgeting unpredictable and cost money. Not long ago, the city replaced worn tents at a safe-sleeping site for homeless people. The tents were made in China but sold to the city by a U.S. company, he said.
“They were in transit when ‘Liberation Day‘ arrived (when Trump announced the tariffs). So, the cost was ultimately more than what we had contracted for because of the tariffs,” Gloria said.
“There is an interesting confluence of economic turmoil, political turmoil and global turmoil. And it does impact cities,” the mayor added. “I understand why people may not make that connection.”
What they said
The New York Times.
“The United States is the only country among the 184 economies analyzed by the W.T.T.C. (World Travel & Tourism Council) and the global economic advisory firm Oxford Economics that is forecast to see an international visitor decline in 2025.”
