The City has released its preliminary budget for FY 2026, which it is referring to as a “starting point” for addressing a projected $258 million budget shortfall.

“What we are putting forward at this time is a balanced, draft budget grounded in our economic reality,” said San Diego Mayor Todd Gloria. “It will continue to keep our neighborhoods safe, remains focused on reducing homelessness and fixing our infrastructure, and largely protects core city services. With the economic data we have now, we’ve made strategic decisions to minimize service-level reductions, avoid mass layoffs of the workers who keep our City operating, and invest in what matters most to San Diegans.”

In his April 21 newsletter, the mayor pointed out the City is “facing a serious budget deficit — originally $258 million and now even larger due to lower revenues and higher pension costs. But we’ve tackled this challenge head-on. Despite difficult choices, this plan avoids fire station brownouts, pool closures, mass layoffs, and severe service cuts. We’ve identified new revenue sources — including voter-approved reforms — to help maintain vital City operations. At the same time, we’re continuing to invest in the services San Diegans rely on everyday.”

The mayor noted FY 2026’s budget includes: $83 million to repair nearly 390 lane miles of streets and $48.8 million for stormwater projects, with major investments in flood-prone communities; increases for both Police and Fire-Rescue to ensure emergency response remains strong; and over $105 million to support the homeless services system including shelters, Safe Parking and Sleeping sites, and outreach programs.

Gloria presented his draft budget to the City Council in a public hearing on April 21. The City Council, serving as the Budget Review Committee, will hold a series of hearings from May 5-9. The mayor will then release his revised, official budget proposal May 14.

Initial reaction was one of shock by some to the mayor’s draft budget proposal, especially among City libraries and the San Diego Humane Society. Both are targeted for deep budget cuts impacting services. The proposed $2.1 billion General Fund budget currently includes an $8 million-plus reduction to the San Diego Public Library’s budget. If approved, the draft budget will close all City Library locations on Sundays and Mondays starting July 1. These cuts, however, do preserve most programming and community resources during proposed operating hours of Tuesday through Saturday.

“Being this underfunded is not normal,” noted Patrick Stewart, CEO of the Library Foundation SD. “It is not sustainable for the San Diego Public Library to continue to serve their communities at the level expected by its patrons when the City slashes money from the library budget year-after-year. I understand budget cuts for the next fiscal year will impact every area of City services. Knowing this, I am relieved the community services offered at San Diego Public Libraries will remain available to patrons. San Diegans depend on these core programs from early literacy programs, Homework Help Centers, workforce development initiatives, and entrepreneurial services like securing patents and trademarks.”
SDHS was equally distressed voicing deep concern over San Diego Mayor Todd Gloria’s proposed FY 2026 budget, which includes a 20% — $3.5 million — cut to the organization’s contract for providing animal services. “The nonprofit warns that this level of funding reduction could significantly impact public safety and put animals and people at risk throughout the City,” said SDHS spokesperson Jennifer Grantham. “SDHS has held multiple meetings with City officials since January. During these discussions, the nonprofit outlined its contractual and legal responsibilities and emphasized that it cannot absorb a cut of this magnitude without eliminating essential services. While the proposed budget describes the cuts as a reduction in patrols, the consequences may be far more severe — a cut of this size would equate to eliminating SDHS’s Humane Law Enforcement services within San Diego city limits. This includes: The inability to respond to animal cruelty or neglect cases, no enforcement of animal laws in communities, no patrols in parks to address off-leash or aggressive animals, no enforcement of rabies control and other public health protections, no investigations of bites or potentially dangerous dogs.”

“These are not simply operational reductions — they represent a direct threat to public safety,” said Dr. Gary Weitzman, SDHS president and CEO. “A cut of this size would significantly threaten the welfare of the more than 20,000 San Diego animals we care for. To say this would be a devastating blow to our mission and our service to the community would be a tremendous understatement.”

To balance the City’s draft budget and help significantly close the projected $258 million structural budget deficit, the following reductions have been proposed:

– All libraries will be closed on Sundays and Mondays.

– Select restrooms in City parks will be closed seasonally.

– The City’s animal services contract with the San Diego Humane Society is being re-negotiated to lower its cost.

– Getting rid of all 180 fire rings on beaches and within Mission Bay saving about $135,000 a year.

The draft budget proposes $175.9 million in reductions across all City departments. That includes a $30.5 million reduction in personnel costs, a $46.4 million reduction in other costs, a $35 million reduction in contracts with external companies, and a savings of $64 million by delaying contributions to City reserves. The personnel cuts propose eliminating 393 positions, 160 of which are filled. The vast majority of employees in those filled positions are eligible to be transferred to other positions within the organization.