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Mayor Faulconer Boosts Childcare, Housing for Homeless and Small Businesses in Budget Update

Balanced Budget Conserves Reserve Funding to Keep City Finances Strong, Continues Pandemic-Induced Financial Cuts

Tuesday, May 19, 2020 - NEWS RELEASE

San Diego – Continuing to take a fiscally responsible approach to closing the largest budget deficit in City of San Diego history, Mayor Kevin L. Faulconer today released an updated Fiscal Year 2021 budget proposal that continues reductions across all departments, leaves reserves intact, keeps recreation center hours at current levels, and prioritizes federal CARES Act stimulus funds for homeless services, small businesses and childcare for frontline workers. 

“We’re focused on helping our neighbors weather this crisis and keeping San Diego’s finances healthy for the long-term. Childcare, housing and employment are critical needs right now and are front and center in this budget update,” Mayor Faulconer said. “The road to recovery will be long, so my plan leaves reserves intact so the city leaders of tomorrow can benefit from the responsible financial decisions we make today.” 

With a focus on essential services amid the COVID-19 pandemic, Mayor Faulconer has proposed a balanced $1.6 billion operating budget that preserves public safety while maintaining neighborhood services and holding the line on targeted workforce and service level reductions.

Budget reductions the Mayor proposed in April remain in this plan, with a focused restoration of recreation center operational hours and pools to current levels in the May Revise. Mayor Faulconer’s budget revision does not tap reserves in order to maintain healthy rainy-day funds for future City leaders after he leaves office in December.

Mayor Faulconer calls for using approximately $268 million in state and federal relief funds for:

  • Operational expenditures related to addressing the coronavirus pandemic, including public safety and first responder costs, supplies and other expenses ($189 million)
  • Operation Shelter to Home at the San Diego Convention Center ($50 million)
  • Small business relief ($13 million)
  • Additional homeless services via CARES Act-enabled funding from the U.S. Department of Housing and Urban Development ($11.5 million)
  • Childcare for essential workers ($5 million)

 The pandemic has prompted a budget deficit of more than $350 million for the remainder of Fiscal Year 2020 and the entirety of Fiscal Year 2021, surpassing the budget challenges the City faced during the Great Recession in 2008. Budget reductions and mitigating actions proposed last month include:

  • Closing libraries on Sundays and Mondays, the days with the fewest visitors ($6.8 million in savings)
  • Decreasing next year’s round of arts and culture grants by 50 percent ($5.8 million)
  • Cutting back on tree trimming ($1.8 million)
  • Reducing STAR-PAL program ($1.4 million)
  • Reducing economic development support for outside organizations ($1 million)
  • Decreasing maintenance at City facilities ($900,000)
  • Eliminating 275 budgeted positions from the City’s current workforce of more than 11,000

The shuttering of restaurants, hotels and other businesses stemming from COVD-19 public health orders have caused a significant drop in sales and transient occupancy tax – two of the City’s largest revenue sources. Since Mayor Faulconer released his initial budget proposal last month, revenue projections for the transient occupancy and sales taxes have plummeted by an additional $62.1 million and $7.7 million respectively.

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