San Diego Mayor Todd Gloria declared a hiring freeze, imposed restrictions on non-essential funding, and initiated a review of the city’s leases and contracts due to a projected $258 million deficit in the upcoming fiscal year.
Gloria, who was reelected for another four-year term, pointed to the rejection of a proposed sales tax increase by voters in the recent election.
The failed Measure E, also known as the San Diego Transaction and Use Tax, would have raised the city’s sales tax by 1 percent, bringing it to a total of 8.75 percent. Currently, San Diego’s sales tax rate is 7.75 percent, making it one of the lowest in the state.
“Measure E could have stabilized the city budget and allowed us to continue investing in infrastructure, housing, homelessness, and public safety,” Gloria stated. “Without this additional revenue, we face tough decisions in the upcoming budget cycle.”
The estimated $400 million that Measure E would have generated could have been used for various city needs, including infrastructure projects and essential services.
Despite falling short by a narrow margin in the election, Gloria announced that essential positions will remain vacant, and measures like overtime suspension and spending freezes will be implemented to address the financial shortfall.
The City Council will begin the budget process on December 11 to address the projected deficit. Last year, Gloria had to make cuts to services like libraries and parks due to funding challenges, but this time, more significant cuts may be necessary.
The city’s Five-Year Capital Infrastructure Planning Outlook identified critical maintenance and construction needs totaling $9.25 billion over the next five fiscal years, emphasizing the importance of balancing the budget while meeting community needs.
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