San Diego officials present $5.65 billion FY25 budget; finance staff warn of FY26 structural gap

The city of San Diego's proposed fiscal year 2025 budget totals $5,650,000,000, city finance staff told the council at a public hearing on May 8.

"The citywide fiscal year 20 25 proposed budget is $5,650,000,000 and prioritizes investments in infrastructure, maintaining core services, staffing new facilities planned to open next year, as well as expanding homelessness shelter capacity," Ben Battaglia, assistant director in the Office of Finance, said in the council chambers. Battaglia described the FY25 capital improvement program as "$871,900,000, which is the largest CIP ever for the city."

Officials said the general fund increase reflects negotiated compensation and pension costs, expanded shelter and safe-parking capacity, and staffing for new facilities, and noted that the budget relies substantially on one-time resources. "Absent any new revenue sources, significant reductions will be needed in fiscal year 20 26 to address the structural budget deficit," Battaglia said.

Finance staff outlined mitigation actions, including waiving reserve contributions, debt-financing certain cash-funded CIP projects and using cash balances and San Diego Housing Commission funds to close homelessness funding gaps. The presentation also flagged $110,000,000 in proposed reductions and an $82,500,000 increase in enterprise funds, primarily for public utilities and the Pure Water program.

Councilmembers and members of the public used the hearing to press for restorations to community programs and infrastructure projects. During the public comment period, staff and speakers repeatedly raised risks to services if one-time revenues are relied on to balance the budget.

Next steps: the council heard that the May revise to the budget is expected next week and that a Budget Review Committee meeting will consider modifications in June.