The realities of San Diego's fiscal crisis became more tangible Monday as City Manager Lamont Ewell outlined his proposal for the city's 2006 budget. Ewell told the City Council it will have to focus on the city's needs, not wants, and suggested cutting hundreds of city jobs, reducing library and pool hours and scaling back a school-based child-care program.
Calling his proposed budget "austere" but designed to provide the city with a fresh start, Ewell presented the City Council with a plan to spend $2.37 billion next year-$116 million less than in 2005.
The city is scheduled to make a $163 million contribution to its embattled pension system, which is $1.4 billion in debt. It's the first time the city has paid the system what it owed in a decade, but it won't be enough to keep the deficit from growing.
Included in Ewell's proposal was the recommendation that the City Council cut 355 jobs from the city payroll, but Ewell noted that 42 percent of those positions are vacant.
The city manager's proposal assumed a reduction of roughly $25 million to the city's general fund, which covers day-to-day expenses such as filling potholes, maintaining parks and paying cops and firefighters. While the general fund total will be reduced, monies will be shifted to provide a nearly $35 million increase for public safety. However, Ewell acknowledged that increase will not fund 100 percent of public-safety needs and would mainly go toward covering increased labor and retirement expenses.
With public safety a top priority and general-fund dollars limited, Ewell said other city services would have to be slashed. He recommended cutting library funding by $2.9 million and eliminating more than 20 positions. He also suggested reducing library hours, the amount of money allocated to buy new materials and putting off buying new computer equipment.
From the Park and Recreation Department Ewell wants to cut $3.5 million and 64 jobs, reduce recreation-center operating hours and close 12 city pools during the winter months.
Ewell also recommended cutting $3.8 million and eliminating 15 positions from the Community and Economic Development Department, including the city's homeless services coordinator, currently filled by Sharon Johnson. Part of the savings would come from closing all 11 community service centers, which provide one-stop shopping for an array of city services to citizens, and eliminating the 6-to-6 program at 35 schools, which provides children with a place to study before and after school.
Last February, Ewell cut $26.5 million to offset a 2005 budget shortfall and the most recent reductions would come at a time when many city services are already operating on fumes. The City Council didn't take any action at Monday's meeting and will continue to discuss budget specifics in greater detail at public hearings held every Monday until June 27.
A large contingent of parents implored the City Council on Monday to find a way to fund library and pool services as well as the 6-to-6 program. Labor leaders were also on hand to say city workers shouldn't have to carry the burden of the city's financial woes.
Meanwhile, a budget battle is shaping up between those who want to increase the city's revenue and those who want to cut expenses.
The Center on Policy Initiatives (CPI), a progressive think tank with union support, made the case for increasing the flow of cash into city coffers. The report, which compared San Diego to California's other nine largest cities, found that San Diego falls below average when it comes to taxes and fees, noting that San Diego raises $38.67 per month per resident to pay for general services, well below the 10-city average of $57.75.
The report suggested increasing the transient occupancy tax levied against hotel guests, the business license tax, the utility user's tax and the real property tax, as well as institute a garbage collection fee, albeit sometime down the road.
"We can't do that now," said Donald Cohen, CPI's executive director, who noted that any increase in taxes would require voter approval. "Our proposal will have no effect on the budget this year.... This is a structural deficit, and we need to work on the structure."
However, he said the City Council could take immediate action by increasing fees for business licenses and planning and building services. "If there are things that we are undercharging for, then we should charge full price."
On the other side of the battle are Carl DeMaio and his Performance Institute, another think tank with the goal of making government more transparent and efficient. He presented the City Council with a financial recovery plan that calls on the city create an "honest" budget that won't fall apart the day after it's passed.
DeMaio, who drew boos Monday from a crowd of labor leaders and city workers sitting in the front rows, focused on the city's escalating labor costs, which he said eat up 78 percent of the general fund. He asked the City Council to renegotiate union contracts to reduce pension liabilities and impose five years of caps on labor costs, the election of a city comptroller and voter approval of city benefits. He wants the City Council to give voters a chance to vote on his plan in July's special election. He says he has secured funding and is threatening to launch a ballot initiative for November if they don't.
"The city's broke, and we need a totally new way of doing business," said DeMaio. "There's no way that a tax increase is going to pass in the city of San Diego as long as: a) we don't have an audit of existing taxpayer funds, and b) the city cannot show that it's accountable with existing monies."
Cohen said he doesn't agree with drawing a line between revenue increasers and expense cutters, calling budget cuts "an inevitability.""It's a battle between ourselves," said Cohen. "We want more than we pay for."