Wednesday, the City Council approved by a 7-1 margin my spending plan for the city through the final six months of the current fiscal year as well as next year. By adopting an 18-month budget, we were able to spread out the projected deficit for next year over a longer period of time, and that means fewer services had to be cut to balance the budget.
The plan is a mix of spending cuts and one-time solutions that together add up to the only responsible way to address a deficit that is largely a result of the worst economic recession in generations.
The recession has hit every one of the city’s funding sources extremely hard, particularly property, sales and hotel taxes. On top of that, last year’s stock-market losses caused an enormous spike in the amount the city was required to pay into our pension system. Together, these factors created an unprecedented gap between our anticipated revenues and operating costs.
Balancing the budget through cuts alone would have decimated city services – and would have meant laying off hundreds of sworn police officers and fire fighters, closing libraries and recreation centers, and other severe impacts to San Diegans’ quality of life.
I applaud the City Council for taking steps to address next year’s budget gap immediately and responsibly. But while we’ve largely addressed our immediate fiscal problems, our work is only beginning. For we know that even when the economy improves and revenues return to normal historical levels, the city will still have a structural deficit.
My administration has been whittling away at the perennial shortfall through both short- and long-term measures since the day I took office.
We’ve trimmed nearly $45 million from our budget on an ongoing basis through department-streamlining measures – which means we cut costs without affecting the level of service our taxpayers receive.
We’ve put our information technology services out to bid with the private sector for the first time in 30 years, which we anticipate will save the taxpayers millions each year.
We’ve made major structural reforms to the city’s pension and retiree health care systems for new employees, which over the next several decades will wring tens of millions of dollars out of the city’s costs for retirees. The new plan, which took effect this past July, asks employees to contribute more toward their retirement and ends many of the costly perks of the old pension plan.
We’ve also implemented a new, integrated software system for the entire city to replace antiquated and inefficient systems that impeded our ability to get a full accounting of expenditures and to monitor fiscal activities throughout the city of San Diego’s various departments. This system will increase accountability and efficiency and improve financial planning, making your government more responsive and responsible.
But there’s still much more to be done, and I’m committed to working with the City Council, our employees and our citizens to continue transforming San Diego from what it once was – a city in crisis – to a model of efficiency, accountability and fiscal responsibility.