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Wednesday, Oct. 7, 2009 | In political crises, catchphrases often emerge that major players use to define a moment.
The crisis of the city of San Diego’s $179 million budget deficit began in earnest last week when Mayor Jerry Sanders released his five-year financial forecast revealing that deficit for the first time.
There have to be answers and there will be by the time Sanders signs the budget next June. But, for now, no one knows what they will be. So the answer is a catchphrase.
“Everything is on the table.”
Sanders referenced the expression in his press conference last week. City Chief Operating Officer Jay Goldstone is a frequent table setter, including this morning when City Council held its first hearing on the budget. Council President Ben Hueso and Councilman Todd Gloria were among those ready to put everything on the table today, too.
Since Sanders released his forecast and the city’s independent budget analyst followed up with her deficit estimate north of $200 million, outlines for the debate are developing.
For next year, there is no time for a major increase in revenue. There is no time to address the city’s largest ongoing liabilities like its backbreaking pension bill. There is no time to see results from long-touted and long-stalled potential cost savers like the city’s managed competition outsourcing program.
There is time to make service and staff cuts.
The Mayor’s Office will ask city departments, including police and fire, to propose cuts of 20 to 25 percent of their budgets with the target of a 24 percent across the board reduction, Chief Financial Officer Mary Lewis told council.
Lewis’ statement startled the crowd sitting in council chambers. One audience member murmured, “Jesus.”
Hueso turned philosophical.
“You threw out a number of 24 percent cuts, and that’s a very descriptive number because it shows us to what extent $200 million means,” Hueso said. “Twenty-four percent. Personally I don’t know how we’re going to meet that program given my understanding of specific departments. You cut 24 percent of a certain department you might as well not even have that department.”
To be sure, Lewis clarified that each department would be evaluated individually and might not see cuts that drastic.
But for some perspective, you could do away with the entire departments of parks and recreation, engineering and capital projects, city treasurer and city comptroller and still not cover this year’s deficit.
Councilman Carl DeMaio delivered his own presentation Wednesday morning and made that point in starker terms. The deficit, he said, could be almost $100 million higher than the mayor’s estimate when you add in costs for retiree health care and debt service for neighborhood infrastructure. His solution relies on long-term pension reform.
“My friends, there is no tax increase big enough, there are no service cuts to our neighborhoods that will be deep enough to solve our city’s financial problems,” DeMaio said.
To that end, council began discussing how it would analyze the deficit this year and going forward.
Councilwoman Donna Frye emphasized process and nuts-and-bolts. Identify different options in staffing, services, revenues, contracts, retiree programs. Have the budget on a spreadsheet and hold a meeting where the council members plug in numbers and see how those options affect this year’s deficit and those down the road.
“I really suggest that we start working on that so we have that tool available as we do these budget discussions so we know very quickly where we’re at and what’s going to work,” Frye said.
Timing, everyone said, is important. Goldstone and Councilman Tony Young agreed that the city should make decisions on staff and service cuts by the end of the year. The sooner costs are removed from the budget the more the city can save by taking them off the books.
In other words, every day the city waits, means less than everything will remain on the table.