California Construction News staff writer
While current construction projects in the City of San Diego’s Capital Improvement Program (CIP) will continue, new facility construction will be limited and subject to review.
Facing a $258.2 million budget shortfall for the 2025 fiscal year, Mayor Todd Gloria has outlined a series of actions including:
- a comprehensive review of capital projects prioritizing essential infrastructure and limiting the construction of new facilities
- eliminating new construction
- cancelling Civic Center revitalization
- evaluating city office space leases
- finding ways to monetize city facilities
The announcement comes after the defeat of Measure E, a proposed sales tax increase that would have provided additional funding to stabilize the city’s finances.
“Without the additional revenue from Measure E, we face tough decisions in the coming fiscal year, but we will use this as an opportunity to rethink how we operate,” Gloria said. “Our primary goal is to continue delivering essential services, such as repairing roads, addressing homelessness, and building more housing, all while living within our means.”
The council budget committee will meet Dec. 11 to discuss the budget situation.
The city has halted the Civic Center Revitalization process, instructed staff to review office space leases for possible renegotiation or early termination, and is exploring ways to generate revenue by monetizing city properties such as Golden Hall and its adjacent parking structure.
“These are difficult decisions, but we must confront the fiscal realities head-on,” Mayor Gloria said. “We need to make tough choices now to ensure the long-term sustainability of our city’s finances and continue providing the services San Diegans rely on.”
The shortfall is a result of a structural deficit that has been building for years and has been exacerbated by inflation and rising operational costs. In 2024, the Mayor and City Council addressed a $170 million shortfall through strategic cost reductions and one-time funding sources. However, with the failure of Measure E, the need for further cuts has become even more urgent.
“We need to work together to protect the safety of San Diegans, address the needs of under-resourced communities, and ensure a strong economy,” LaCava said. “This will require tough decisions, but we must focus on maintaining core services.”
Looking ahead to the FY2025-26 budget, Mayor Gloria said he plans to align the city’s expenditures with the current fiscal reality. He intends to address the deficit in a single year, rather than spreading cuts over multiple years.
“We will make the necessary decisions now so we can continue to invest in the things that matter most — keeping our communities safe, maintaining infrastructure, and addressing homelessness,” Mayor Gloria said. “It’s essential that we’re strategic and transparent as we navigate these challenges.”
