Lemon Grove Inching Closer to Financial Insolvency

Written by Michael Palomba 

Lemon Grove is facing major financial woes, and the COVID-19 crisis may have been enough to push the city to the point of no return.

City officials revealed that the projected year-end deficit increased by nearly $500,000, citing COVID-19 as the primary reason. They are projected to be $770,000 upside down this year, and $1.8 million short at the end of next year.

While COVID-19 certainly added to the city’s financial troubles, it didn’t cause them. Lemon Grove has been struggling financially for awhile now. In March, they attempted to pass Measure S, which would’ve increased sales taxes by three-quarters of a cent. The measure failed to reach the required majority, receiving just 42.54% of the vote.

If Lemon Groves does default, it would forgo its city council and hand its governing authority over to the County Board of Supervisors. At this point, that outcome is not just plausible, but likely. At its current rate, Lemon Grove is projected to run out of money completely in just two years.

The coronavirus pandemic has amplified this by cutting off a lot of tax revenue. Since the stay-at-home restrictions are still in effect and many businesses are forcefully closed, people are spending less money. With one in four San Diegans now unemployed, some people simply can’t afford to spend like they used to. 

Lemon Grove has taken action to try and stop their financial decline. They’ve cut public salaries, switched insurance providers, tried to use less paper, among other things. One of their biggest moves was a hiring freeze, leaving all open positions unfilled indefinitely. “Every city in California is looking at these kinds of service cuts,” said Lemon Grove City Planner Lydia Romero.

The city doesn’t qualify for funding under the CARES Act due to its small population, but is eligible for $60,340 Community Development Block Grant. Nonetheless, the grant only covers a small fraction of Lemon Grove’s expenditures.