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NewsVoice of San DiegoAugust 7, 2026San Diego

National City faces potential insolvency by 2030 due to rising personnel costs

National City officials warn the city could become insolvent by 2030 after exhausting reserve funds to cover a $13 million budget deficit. The fiscal crisis is primarily driven by a 50 percent increase in personnel spending over the last three years, while the City Council has rejected proposed business tax increases to address the shortfall.

budgetmunicipal financelabor unionselectionsinsolvency
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Why It Matters

Residents face the potential closure of essential public services, including the library, swimming pool, senior center, and community feeding programs, if the city cannot resolve its structural budget deficit.

Key Facts

  • The city faces a projected insolvency by 2030.
  • The current budget includes a $13 million deficit, covered by depleting the city's remaining reserve funds.
  • Personnel costs have increased by nearly 50 percent over the last three years, rising from $41 million in 2024 to over $60 million this year.
  • Personnel spending now accounts for more than two-thirds of the city's general fund budget.
  • The City Council voted to shelve a proposed business tax increase.
  • If the city declares insolvency, a state-appointed receiver or trustee would take control of all municipal decision-making.
  • Potential cuts to balance the budget include closing the library, pool, and senior center, and ending the city's feeding program.
  • The city's main employee union is Local 221 of the Service Employees International Union (SEIU).

Who's Mentioned

personJose Rodriguez“Councilmember and mayoral candidate.”personMarcus Bush“City Councilmember.”personRon Morrison“Mayor of National City.”organizationService Employees International Union Local 221“Primary labor union representing city employees.”personDoug Schulze“City Manager who warned of potential insolvency by 2030.”