Last week, before the City’s Budget and Finance Committee, I presented a timeline for a balanced budget for fiscal year 2011 – including my strong recommendation that the City Council act early in order to reduce the impact these unavoidable budget cuts will have on city services.
I thought it was important to discuss the process we will be following, because it is crucial that the public understands what we’re doing and why we’re doing it this way.
There are a lot of tough decisions ahead of us and with every tough decision comes a temptation to procrastinate.
It’s human nature to hope that a crisis, if given enough time, may cure itself.
Or to hope that the economy will spontaneously recover and our revenues will miraculously multiply.
Or to hope that a magic memo can solve our problems.
But hope is not a strategy.
And false hopes – which distract our attention and delay our decisions -- will only exacerbate our problems.
This is why I am moving forward to close this budget deficit quickly and to begin the new year with a balanced budget.
The sooner we make these cuts, the fewer cuts we will have to make.
Our General Fund deficit is currently estimated to be $179 million.
But if the new budget is implemented earlier, the level of cuts needed to balance the budget will shrink.
This is because the savings realized in fiscal year 2010 will accrue over a longer period of time, and can be used to close the budget gap in 2011.
For every month the new budget is in effect before July 1, we reduce the level of cuts we need to make by approximately 10 million.
So if our new budget took effect January 1, we could reduce the amount of cuts by approximately $60 million.
That’s approximately $60 million in public services that would be saved.
To put that number in perspective, this year’s Library Department budget is $37 million. Our Park and Recreation Department budget is $86 million.
At a time when every department is considering deep cuts in popular programs and neighborhood services, a savings of that magnitude cannot be ignored.
But to achieve that goal, we must do more than start this process quickly, we must end it quickly.
Last week, department heads were given individual budget reduction goals that are equivalent to roughly 27 percent of their discretionary budgets.
We’ve asked them to identify permanent budget cuts that will help us in succeeding years -- not one-time cuts that don’t reduce our structural deficit, and not cuts in our General Fund reserves, which will increase future costs by damaging our credit ratings.
Their assignment is tough.
From those recommendations, I will work with the Financial Management team to develop a balanced budget for release in November and adoption by the City Council in December.
Meanwhile, Councilman Tony Young, who serves as the Chair of the Budget and Finance Committee, will be conducting the San Diego Speaks program that was so successful last year at engaging the public in a meaningful dialogue about City priorities.
I know that every Council member is also soliciting ideas and input from their constituents, as I am on the City website.
Believe me, we wouldn’t be doing this if there was a silver bullet out there that would solve our budget problems.
There is no tax hike that will save us.
There is no shell game we can play with our redevelopment funds.
There is no way to reduce our employees’ vested benefits without violating the law.
There are simply difficult choices, which will become less painful if we act sooner rather than later.
I’m confident in the process we’ve designed, because this City Council has already proven it can make difficult choices.
But by focusing on honest solutions, and implementing a budget after the first of the year, we can reduce the impact these cuts will have on our neighborhoods and our quality of life.
This will not be easy, but together we will guide the City out of this financial crisis.