Even when an emergency $43 million midyear budget cut is factored in, the city of San Diego will still have a $44 million general fund deficit next fiscal year (2010), which could balloon to $96.5 million in fiscal 2011, according to a worst-case scenario presented in a new five-year budget outlook published today by Mayor Jerry Sanders’ administration.
A significant portion of the deficits would come from increased payments the city would have to make into the city’s pension fund if it does not recover the massive investment losses it has incurred this year. As of Oct. 31, the pension fund deficit was $2.78 billion, more than twice what it was a year ago.
If the fund does not recover its losses, most of which have been incurred in recent months, the city could have to contribute $185 million out of its general fund, which covers its day-to-day operations, to the pension system, about $25 million more than it contributes now.
Under this scenario, the general fund deficit is projected to be $95.5 million in 2012 and drop to $71.8 million by 2014. A rosier scenario, predicated largely upon improving financial markets, projects a 2010 deficit of $44 million, a 2011 deficit of $68.3 million, a 2012 deficit of $58.1 million, a 2013 deficit of $33.8 million, and $20.6 million in 2014.