San Diego City Taxpayers Need New Budget Solutions From City Hall

Vince Vasquez Vince Vasquez 2 Comments

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This Tuesday, San Diego Mayor Jerry Sanders publicly released his plan to close the estimated $179-201 million gap in the Fiscal Year 2011 General Fund budget at City Hall. While Sanders’ proposal minimizes the deficit’s impact on residents without raising taxes, it fails to secure the long-term interests of local taxpayers. Why?

#1 Short-term financial fixes are heavily relied upon. Of the $179.1 million in budget-balancing methods proposed in the Mayor’s plan, 54%  ($96.8 million) are “one-time solutions.” These solutions include deferring future contributions to budgetary reserves and raiding millions of tax dollars designated for park and library improvements. Marginal, interim fixes like these mask the true size of City Hall’s fiscal crisis from the public and delay the need for more difficult service cuts which may be politically unpopular.

#2 San Diego City Hall will continue to spend more money than it takes in. According to the City’s Five Year Financial Outlook updated in October 2009, total General Fund revenues are expected to increase $135 million over the next five fiscal years ($1.061 billion in FY 2011 to $1.196 in FY 2015), but they will still be outpaced by soaring Fund expenditures ($1.240 billion in FY 2011 to $1.333 in FY 2015). The reason for this is largely our pension debt obligations. The pension debt paid out of the General Fund will double in the next five years, from $125 million this  Fiscal Year 2010 to $257 million in Fiscal Year 2015. Out-of-control city spending is a structural financial problem that existed prior to the national economic downturn that began last year, and has been publicly acknowledged by City Hall since November 2006.

#3 Only structural budgetary reforms will bring financial solvency and taxpayer accountability to City Hall. Regardless of our economic climate, the public will still rightfully demand city services that retain their quality over time. Large cuts in budgeted vacant positions and the city workforce, like those proposed in the Mayor’s plan, will only erode city services and disenfranchise taxpayers, not protect them. Keeping the doors open in our neighborhood libraries and recreation centers will require new budget tools that increase cost-efficiencies and reform costly labor policies, such as direct outsourcing, contract transparency, public-private partnerships, and competitive 401(k) plans for new city employees.

What’s Next? According to the Mayor’s Office, the budget proposal will be reviewed by the City Council’s Budget & Finance Committee on December 2nd, and will be brought before the full Council on December 10th and 14th. The ink isn’t dry on this proposal, and may be changed in the coming weeks.

The short press release version of the Mayor’s budget plan can be found here, and the longer detailed version can be found here.

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  2. I’d like to hear the Unions plan to get San Diego out of this mess. BTW, I’m not putting the blame on the Unions for this fiscal mess. The blame lies solely on the past and current councils that allowed this mess to occur. Tax increases really isn’t the option in these economic times. Doing so will scare businesses away, thus lowering revenue. You overtax citizens that are already hurting and they will move out of San Diego City, and then we run into urban blight, and thus less revenue. You increase taxes on tourists and they will go elsewhere, and then you have not only less revenue, but more businesses closing, thus more lost revenue. And then you have the loose cannon called Sacramento, with their ability to raid the coffers of Cities and Counties to “solve” their own mess (That is a whole other issue. Sacramento will never learn fiscal responsibility if they can raid the Cities and Counties). Mayor Sanders is trying to do his best. I’m glad I’m not in his shoes in regards to this issue.

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