San Diego expects deficit cleared amid $6.5B backlog

San Diego’s five-year financial outlook projects that the city will enter the next fiscal year with a balanced operating budget, without relying on one-time funds or making another round of service cuts. Mayor Todd Gloria and city finance officials credit years of spending reductions, fee changes and other fiscal measures for closing a structural deficit that reached hundreds of millions of dollars. The forecast shows a small surplus in fiscal 2028, followed by comparatively modest deficits in later years, though officials caution that the projections could change. The improved outlook does not resolve the city’s multibillion-dollar infrastructure backlog, restore recent library and other service cuts, or bring reserves back to target. The city’s proposed budget will be released in April and must be approved by the City Council by the end of June.