San Diego City Council President Discusses Looming Budget Shortfall

City Hall Faces Another $110 Million Shortfall Next Year as Revenue Projections Fall Short

Feb. 5, 2026 at 8:23pm

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Even after passing last year's budget, San Diego City Council is facing another significant budget shortfall, with a projected $110 million gap for the upcoming fiscal year. Council President Joe LaCava discusses the city's financial woes, acknowledging mistakes in last-minute budget adjustments and the need to make "difficult decisions" to balance the books.

Why it matters

San Diego's budget challenges highlight the ongoing financial pressures facing cities, with the pandemic and economic uncertainty impacting revenue streams. The council's decisions on where to make cuts could have significant impacts on city services and programs, especially in underserved communities.

The details

The city is currently facing a $17 million shortfall in this year's budget, with revenue coming in lower than projected and expenses higher than expected. Council President LaCava admits there were issues with last-minute budget adjustments that relied on speculative revenue sources. Looking ahead to next year, the $110 million gap will force the council to consider difficult choices, including potential salary reductions, furloughs, and cuts to programs and services.

  • The city recently released its mid-year budget update, revealing the $17 million shortfall for the current fiscal year.
  • The council is now preparing for next year's budget, which is projected to have a $110 million shortfall.

The players

Joe LaCava

The president of the San Diego City Council, who is discussing the city's budget challenges and the difficult decisions ahead.

San Diego Mayor

The mayor's office and department of finance released the mid-year budget update that revealed the $17 million shortfall for the current fiscal year.

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What they’re saying

“We did a lot of last-minute adjustments. Some of the revenue that the mayor was putting on the table was based on best-available information but was really kind of aspirational.”

— Joe LaCava, San Diego City Council President

“Folks are now aware we're looking at $110 million, which, again, is, what? Roughly 5% of our total budget. But when you look at the deeper cuts we did last year, when you look at the revenue ideas that were put on the table that the public were not excited about, it really creates a much narrower space for us to figure out: How do we meet that $110 million shortfall?”

— Joe LaCava, San Diego City Council President

What’s next

The council will await the mayor's initial budget proposal for the next fiscal year and continue discussions on where to make cuts to address the $110 million shortfall.

The takeaway

San Diego's budget challenges underscore the ongoing financial pressures facing cities, with the need to make difficult decisions on cuts and revenue sources. The council's approach to balancing the budget will have significant impacts on city services and programs, especially in underserved communities.