San Diego Taps Reserves to Close $4.7 Million Budget Gap

City officials tapped the city’s rainy-day fund to cover a $4.7 million deficit at the close of fiscal year 2026 while awaiting a reimbursement from the state’s office of emergency services, according to a report by the city of San Diego’s Department of Finance.

It was the first time in more than a decade that officials had drawn from its reserves.

Several councilmembers voiced concerns about the move during an Oct. 21 City Council Budget and Government Efficiency Committee meeting. Councilmember Vivian Moreno said she was disappointed officials tapped reserves, noting they avoided doing so during the Covid-19 pandemic.

The fact that we’re doing so now raises serious concern about our financial stability and our ability to prepare for future emergencies,” Moreno said in the meeting.

Mayor Todd Gloria recently said that the city is on stronger financial footing , but the pull from reserves has added to ongoing concerns among councilmembers about the city’s fiscal stability and structural deficit. A structural deficit means ongoing expenses are greater than ongoing revenues.