At the Feb. 24 City Council meeting, staff presented the city’s mid-year budget and economic review. 

Halfway through the fiscal year, most revenues for the City of Carlsbad have met or exceeded expectations and the city continues to operate with, and project, a balanced budget through the end of the fiscal year. Despite the slower revenue growth, the city’s overall economy remains stable. 

The latest data, from July 1 to Dec. 31, 2025, shows Carlsbad continues to have San Diego County’s second-highest gross regional product, a measure of the total value of goods and services produced in the city. Carlsbad’s five key industry clusters – life sciences, technology, clean technology, sports and active lifestyle, and hospitality and tourism – continue to provide economic diversity and long-term resilience. 

At the same time, the local economy is sending mixed messages amid uncertainty. Hiring, commercial leasing and housing momentum softened modestly, consistent with broader national cooling trends. 

• The city uses a variety of data and models to forecast economic activity, which has a direct effect on city finances used to pay for local government services.  

• By receiving quarterly updates, the City Council can closely track city spending and revenue trends to help inform its policy decisions.  

About 80% of city revenues that fund day-to-day services like the Police and Fire departments, parks, recreation and libraries come from three sources: property tax, sales tax, and the tax visitors pay when they stay in Carlsbad hotels and short-term vacation rentals. All three are influenced by the strength of the economy.  

Mid-year budget adjustments 

On Tuesday, the City Council approved several mid-year funding adjustments for various operational needs, including:  

• $200,000 for the state’s medical transportation reimbursement program or Public Provider Ground Emergency Medical Transportation program, which reimburses cities for ambulance transports for Medi-Cal patients. Cities must make quarterly payments that are matched with federal funds and returned as reimbursement for eligible transports. The required local payments have increased due to program changes, and as a result additional funding was needed to cover the remaining cost.  

• $150,000 for ambulance services to address a temporary service gap created after the City of Oceanside suspended an ambulance that serves both Carlsbad and Oceanside due to an unforeseen budget issue in Oceanside. In order to maintain service levels the city put an additional ambulance into service to meet the increased need while Oceanside addresses their internal challenges. We are optimistic the transportation cost recovery will offset the temporary personnel expenses. 

• $90,000 for a police mobile trailer unit to enhance public safety by providing a visible, mobile crime-prevention tool that can be quickly deployed to high need areas, special events and emerging crime hot spots. The city owns one unit, and adding a second will provide greater flexibility and ensure coverage when the other is already in use or out of service for maintenance. 

• $50,000 for one-time transportation needs such as additional stop signs, striping improvements and additional traffic studies. 
   

The full mid-year budget and economic review, along with approved adjustments, is available on the city’s website.