Taxpayers Association Finds County of San Diego Drifting Toward Structural Deficit as Spending Outpaces Revenue
New county analysis reveals staffing has grown nearly four times faster than population while capital investment falls to a 16-year low
This past month, the San Diego County Taxpayers Association today released its Financial Health Analysis of the County of San Diego, finding that a County balanced on paper is drifting toward a structural deficit — driven by personnel growth that outpaces population, rising Health and Human Services costs, collapsing capital investment, and heavy dependence on state and federal dollars it does not control.
County staffing has grown 28 percent since 2011 — from 15,842 to 20,280 full-time equivalents — nearly four times faster than the County’s 6.5 percent population growth. The County now employs 6.15 staff per 1,000 residents, up from 5.07, and personnel costs have risen 53 percent in inflation-adjusted dollars to $3.53 billion, now 40.8 percent of the budget, up from 32.5 percent.
“The County spends more every year to grow its workforce while the infrastructure that supports operations is allowed to crumble,” said Mark Kersey, president and CEO of the Taxpayers Association. “More than half of the general fund comes from Sacramento and Washington — dollars the County cannot control — yet it has not prepared for cuts already scheduled.”
Capital investment is a clear casualty. The County’s capital improvement program has collapsed to $45.8 million in Fiscal Year 2026 — the lowest in the sixteen-year dataset and only 0.5 percent of the budget. The County has published no facilities condition assessment for its 7.6 million square feet of buildings, even as the deferred Vista Detention Facility replacement alone nears a projected $1 billion.
Health and Human Services — the County’s largest program area — has grown $858 million since 2011 and now consumes 40.7 percent of the budget, while the County operates or contracts out the operations of 46 distinct homelessness programs funded by 28 different sources, a fragmentation a December 2024 Deloitte assessment found makes cost-effectiveness nearly impossible to evaluate. With more than half of general fund revenue from intergovernmental transfers, the federal “One Big Beautiful Bill Act” alone is expected to cost the County roughly $300 million a year in Medi-Cal and food-assistance funding — with little prospect that a state facing its own ~$18 billion deficit will backfill the loss.
Demographics compound the problem: SANDAG projects the County’s population aged 65 and older will grow by 244,000 by 2050, raising demand for its costliest services while shrinking the working-age tax base. The County cannot grow its way out, the report concludes.
“Every one of these pressures — the federal cost-shifts, the aging population, the maintenance backlog — is knowable and already on the calendar,” said Mike McLaughlin, chairman of the Taxpayers Association Board of Directors. “The County’s job is to build a budget that can absorb them. Instead, the data shows it drawing down reserves and leaning on one-time money in the very year it was warned about the cliff.”
The analysis arrives as the County finalizes its $9.16 billion Recommended Operational Plan for FY2026-27 and FY2027-28, up for a Board adoption vote on June 25. The Association credits real progress — the slowest staffing growth in the dataset (0.5 percent) and a capital program more than doubled to $120.2 million — but finds it does not resolve the structural concerns, and on one moves the wrong way: the County’s “responsibly unlocked” reserves describe a near-tripling of general fund drawdown, from $53 million to $159 million, to balance a single year even as a fixed federal cost-shift schedule runs through 2028. The capital rebound is funded largely by new debt, and the County’s own plan shows general fund revenue falling $231.8 million in FY2027-28 — a cliff the Association urges the Board to weigh as it adopts the plan.
The full Financial Health Analysis of the County of San Diego is available at SDtaxpayers.org
Founded in 1945, The San Diego County Taxpayers Association is a non-profit, non-partisan organization dedicated to promoting accountable, cost-effective and efficient government and opposing taxes and fees which are unnecessary, ill-conceived, or poorly planned. For more information, please visit SDtaxpayers.org or call 619-234-6423.
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