Despite the economic impact of the COVID-19 pandemic, San Diego’s annual five-year financial outlook released Friday forecasts the city’s general fund revenues will return to pre-pandemic levels by Fiscal Year 2023 and exceed them the next year.
The report, focusing on FY 2023 through 2027, also projects the city’s Transient Occupancy Tax — essentially a hotel tax — revenue will pass 2019 levels by 2024. Additionally, it found the city’s general fund reserves remain at $205 million.
Mayor Todd Gloria gave his administration — and federal coronavirus relief funding — credit for much of the bounce back.
“We are making great strides toward rebounding from an unprecedented period in our history, but we still have a lot of work to do in addressing the city’s structural deficit,” Gloria said. “We are focused on building a San Diego that works for all of us and will continue seeking out opportunities to help us accomplish our goals.”
The outlook anticipates a $66.8 million revenue shortfall to the city’s General Fund in FY2023, with a “significant and steady recovery” through FY2027, when a $65.2 million surplus is projected. It also pinpointed costs above baseline, including new facilities such as libraries and fire stations, homelessness strategies and solutions, implementing an organic waste recycling program and service requests through the city’s Get It Done app.
The report attributed much of the projected recovery to a high vaccination rate countywide, the continued low transmission rate of COVID-19, resuming travel and the return of large events. The American Rescue Plan Act economic stimulus bill also helped the city from having to tap into its emergency reserves.
“While the city was not able to contribute to its emergency and stability reserves in 2021 and 2022, it also didn’t need to draw from them, despite the catastrophic impact of the COVID-19 pandemic,” said Director of Finance/Comptroller Rolando Charvel. “Federal funds are helping us fill the gap for the next few years.”
“The Five-Year Financial Outlook is not a budget,” a city statement reads. “Still, it does provide the City Council and the public information to facilitate an informed discussion during the development of the FY2023 budget regarding the allocation of limited resources to meet the service needs of San Diego residents.”
Gloria said he plans to use the outlook to develop a balanced budget to present to the City Council by April 15.
–City News Service