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Mayor Jerry Sanders’ office just sent over a memo detailing proposed revisions to the 2009-10 budget, reflecting an additional $23 million shortfall above the $60 million budget gap revealed last month.

That shortfall is expected to increase by as much as $36 million if the state decides to borrow property tax money from cities, a move that appears increasingly likely as polls indicate the state’s ballot measures are headed for defeat Tuesday. That possibility isn’t factored into the budget proposal released today, but city officials have said they are drawing up a contingency plan.

This is the latest increase in the estimated budget gap for the 2010 fiscal year. If the state does borrow $36 million, the city’s shortfall could approach $120 million.

Due to an unprecedented decline in the county’s tax rolls, the city of San Diego is now expecting to receive $383 million in property taxes in the upcoming budget year compared to $396 million this year.

The city is also expected to receive $76 million in hotel taxes for the general fund, compared to nearly $79 million this year. In addition, the Mayor’s Office expects hotel-tax reimbursements for tourism-enhancing services such as police to fall by $1.7 million from the original budget.

In total, this budget reflects $23 million less revenue than the April budget because estimates for property, hotel and property-transfer tax revenues have been revised downward. One figure to watch is sales tax revenue, which hasn’t been changed from the original budget. Sales tax money is projected to decline to $210 million, $3 million less than the current year.

The office is proposing to close the gap through a series of measures that the Mayor’s Office has said will not impede city services. They include:

  • Transferring $2.8 million from the city’s trolley extension reserve fund to the general fund, the city’s main account, which pays for libraries, parks and public safety.
  • Transferring $705,593 from three separate computer replacement funds into the general fund.
  • Accounting for an expected increase in the savings from recently approved labor concessions. The previous budget had included $29.8 million in general fund savings; the revised budget ups that to $33 million.
  • Budgeting an additional $2.5 million savings because of expected police retirements.
  • Reducing the Storm Water Department’s budget by $6.4 million, using money saved up from the current year to pay for some projects. The city may seek to revise the budget during the year.

There are some expenses being added into the budget, including nearly $700,000 to move hundreds of police and fire into different positions.


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