San Bruno budget forecast looks grim: City facing revenue losses; upcoming budget deficit 

San Bruno’s financial woes are caused largely by the state government’s financial decisions, City Manager Alex McIntyre said. That includes a $3.4 million loss from new state restrictions that will prevent casino Artichoke Joe’s from offering blackjack. It also includes potential $8 million in annual losses, plus possible $43 million in repayment, if San Bruno loses rights to sales taxes from Walmart.com, whose e-commerce headquarters are located in the city. 

Aside from $3 million in missing vehicle license fee in-lieu funds, which is a countywide problem based on the state’s bureaucratic distribution system, California is also asking for $2 million back from the Educational Revenue Augmentation Fund, claiming the county’s calculation was invalid.

“Our story today is about the immediate term and the short term, and it’s just a tough story,” McIntyre said. “We’ve been sort of raising the red flags for a couple years, saying this day could come. We are here now because of the state of California.” 

San Bruno’s long-term financial future is more positive, McIntyre said, highlighting plans for a Tanforan rebuild designed to revitalize the city. In the meantime, however, staff and council are looking for solutions to manage what McIntyre termed the “trough years.” 

For the upcoming fiscal year, San Bruno could eliminate its $1.7 million budget deficit — $74.7 million in revenue and $76.4 in expenditures — by freezing eight full-time staff positions, Pegueros said. The city should also be looking at another revenue-generating measure, like a sales tax, parcel tax or hotel tax, to bring to voters by 2028. 

Aside from those options, service reductions or pulling on the city’s reserves could also help alleviate its financial burdens, which are being exacerbated by its regular expenditures outpacing its revenue growth. 

“I want to challenge the notion of reserves being ‘kick the can down the road.’ Some of these reserves, we set them up specifically to address budget shortfalls,” Councilmember Michael Salazar said. “I want to lift the taboo that we absolutely don’t want to touch these.”