We had hoped to comment in this space on Tuesday's labor hearings, during which the San Diego City Council was slated to decide what to do about stalled negotiations between the Mayor's office and four of the city's five employee unions—Mayor Jerry Sanders told the council Tuesday that his team had reached a tentative agreement with the firefighters union—but no action was taken before we had to go to press.
What we can say is that as dire as the city's budgetary straits are right now, they're only going to get worse. CityBeat learned Tuesday afternoon that Mary Lewis, the city's chief financial officer, was expected to report to the City Council's Budget Committee Wednesday morning that, as the city grapples with a fiscal-year 2010 budget deficit of roughly $60 million, the fiscal-year 2011 deficit might exceed $100 million—and that assumes the City Council figures out how to close the $60-million deficit and those savings are carried into the next year. It's a brand-new, huge deficit for fiscal year 2011.
Whatever Lewis says that number is, it becomes even more daunting when you consider how Sanders proposes to get rid of nearly a third of the 2010 deficit: He found $17.8 million. That's right, his finance people say they discovered four pots of money described as “internal stabilization funds.” The mayor's staff seems a bit unclear on what these things are for, but they appear to serve various purposes, such as, for example, a backstop in the event the city can't make certain bond payments. Essentially, they are reserves.
Sanders needs these pots of money so badly that he's willing to appear hypocritical: Late last fall he castigated the City Council when it chose to tap reserve funds to help erase a mid-year budget gap in lieu of closing rec centers and libraries.
Who knows, maybe he'll find $100 million stuffed in a coffee tin next year. Failing that, there's no imaginable way to close that large a deficit other than by raising new revenues. It's too big to be accomplished through another round of labor cuts. The city can raise roughly $80 million a year if it can convince homeowners to pay for their trash pickup and property owners to pay the full cost of the city's efforts to avoid polluting its bodies of water—otherwise known as the storm-water program. Sanders hasn't explicitly said he'll support those fee increases, but believe us when we tell you that he will. He has to. But he doesn't want to say it until he can tell voters that he was able to pry meaningful concessions from the unions.
This is why we fully supported former City Attorney Mike Aguirre's ultimately unsuccessful attempts to undo the increases to city-employee benefits that were granted in 2002. Those increases, which have necessitated increasing contributions to the pension system from the city's general fund, account for part of the deficit the city now faces (it's unclear how exactly how much). The employees who are being asked to take a 6-percent compensation cut can partly blame the union leaders that were part of the 2002 quid pro quo agreement under which the city granted benefits it had no way of paying for unless the stock market shot ever skyward. (You might have heard that that hasn't happened.)
It's important to note that the five employee unions are distinct, separate entities—police officers, firefighters, attorneys, blue-collar workers and white-collar workers—and they've been engaged in separate negotiations. We learned Tuesday that the firefighters have reached an agreement and that the white collars were close. The police union appears to be the only one that's far from a pact. Given that people across the private-sector landscape are withstanding cuts in pay—if not job loss—a 6-percent cut is not too much to ask. Our only pause on that is with the blue-collar workers who already have trouble making ends meet; we don't support any pay cuts that would force more people to rely on taxpayer-supported social services. That's just robbing Peter to pay Paul.
If we understood correctly what was said Tuesday afternoon, of the roughly $30 million in concessions the mayor was trying to get from the unions, there was an impasse over only about $5 million worth.
Considering the budget problems city leaders are going to have to solve a year from now, that's chump change.