San Diego faces new budget crisis amid disappointing tax revenue, rising costs

Lower-than-expected revenues and growing expenses have created a new budget crisis for San Diego that is prompting stricter policies on hiring, overtime, use of contractors and other spending.

The city posted a $22.9 million deficit during the first quarter of the fiscal year that began July 1. More than one-third of the gap was $8.8 million from delaying new parking fees in Balboa Park from October to January.

The city’s independent budget analyst said the gap was particularly troubling because a separate deficit of $110 million is projected for the upcoming fiscal year and the city has relatively low financial reserves of $207 million.

In response, Mayor Todd Gloria has prohibited any hiring without his permission, suspended most overtime and asked department heads to limit training expenses and explore canceling or curtailing outside contracts.

“Your cooperation and strict adherence to these measures are vital for our collective success in navigating these financial challenges,” the mayor said in a recent m...