City and County Budgets for Next Fiscal Year
Friday, June 26, 2009
Next week, the new fiscal year begins and our city and county governments will be working with new budgets. How have local government spending priorities changed in the last year?
GLORIA PENNER (Host): While the State of California still struggles with next year's budget—and we've heard all those horror stories about IOUs going out instead of money to vendors and social service agencies—the City and County of San Diego seem to have discovered ways of easing into the new fiscal year without major pain. So, Ricky, let's start with the city. Fiscal 2010 which starts Wednesday, can we expect smooth sailing for the next twelve months as far as city services are concerned? Can I sit back and relax now as a citizen of the City of San Diego?
RICKY YOUNG (Government Editor, San Diego Union-Tribune): I suppose you could sit back and relax but you might be being over optimistic. The – As you mentioned, the state has yet to resolve its situation and, you know, after closing a $50 and then $60 and then $83 million deficit, which kept growing over time, you know, the city may yet have to cut another $24 million and that could affect your ability to sit back and relax.
PENNER: I'm hearing so many different figures, Andrew. I'm sure you've been following this. The mayor has been dancing out this $70 million figure, and then we hear about a possible $24 million from our gas taxes. So kind of put this into perspective. Oh, oh, we're also hearing about a possible budget shortfall, get this, in excess of $100 million in the coming year, 2011. Are they crying wolf too much?
ANDREW DONOHUE (Editor, voiceofsandiego.org): No, they're not. I think they're – everything's changing pretty rapidly and they're having to re-do their estimates. You know, taxes are coming in at an even far lower pace than they'd even thought they were going to so it's not crying wolf. It is – it's something that's actually changing, you know, by the day, and it's such a desperate situation, there's so many things on the table. But, fundamentally, even if we were in a good year, the City of San Diego has a fundamental structural deficit in its budget and that's something that still hasn't been dealt with by this mayor a number of years into his – into a mayor, a time, a term that was supposed to, you know, solve the city's problems. We still have a major deficit, whether or not we're in good time or bad times.
PENNER: All right, so let me ask our listeners about this. If you live in the City of San Diego or the County of San Diego, we do have a budget in place now. Whether it holds or not is going to be up to the State, but are you relaxed about this now? You've been hearing so much and now it's a done deal. We do have a budget. How do you feel about it? Our number is 1-888-895-5727, 895-KPBS. Tony, from a human nature perspective, what do all those warnings accomplish? You know, warnings about $24 million being taken by the State or $70 million or another problem of $100 million, do they really accomplish anything since taxpayers don't seem to be able to do anything about the budget problems nor do they seem to be motivated to do anything.
TONY PERRY (San Diego Bureau Chief, Los Angeles Times): The City of San Diego is the tail on a very dysfunctional dog, and that dog is the state legislature. And until the structural problems of how power is shared in Sacramento are solved, and there's no solution on the horizon, the City of San Diego is going to buck and jump to the numbers out of Sacramento because the thought is that all money really belongs to Sacramento and they'll let us have a little bit of our money if we're good boys and girls and they don't need it. That's going to continue. That said, San Diego's cheap and I see that the idea of making you, Gloria, pay for your garbage pickup in La Jolla and other places has just kind of gone by the wayside. There's $50 million that we could be, you know…
PENNER: It's not going to happen.
PERRY: Not going to happen. It would take, again, strong leadership. Somebody would have to stand up and say we have to do this, folks, we're the only major city that picks up people's garbage for free. Not going to happen. Marti Emerald, the new city council member had teased about it but I see she's having her own issues getting used to being an elected official and has not pushed it.
YOUNG: Well, there actually was some movement on charging for trash this week. The independent budget analyst did a report a little while ago saying – she – she is often talking about exactly what Tony was mentioning, structural budget problems where we just don't have enough money to pay for city services. Much of this $83 million gap was closed, not by cutting funding or raising revenue, but by finding, hey, there's $17 million over here we didn't know was there and closing the…
PERRY: It's a Rube Goldberg way of financing a major American city.
PENNER: But that's – that's how Marti Emerald figured out not to have to cut back on the staff salaries…
PENNER: …of the city council.
PERRY: Umm-hmm. But it's…
PENNER: And suddenly there was a pocket of money that was discovered.
PERRY: But what the budget analyst has said time and time again, including this week, and what Andrew has talked about, is the structural problem, the San Diego mindset. No dent has been made in changing the San Diego self-pitying mindset that says we deserve decent city services at bargain basement prices.
PENNER: All right, so, Andrew, every year there's at least one council member who talks about having a frank and honest discussion about the budget. Does that ever happen? If it doesn't, why not?
DONOHUE: It doesn't. I think we're stuck in a perpetual sort of shouting match here in San Diego with one side saying we need to raise taxes, we're a cheap city; the other side saying, we pay way too much to our employees and I'm never going to give another dime to a city that gives this rich a benefits. And we're – and we've been stuck in that sort of shouting match since the day I got here. And nobody has ever tried to broker any sort of deal. I mean, we have – we need a leader, some sort of leader, whether it be city council—I – we haven't seen it from the mayor so I don't know why we should expect it now—that gets all these people together and says, listen, I understand that you're mad about these benefits and I understand that – and to the other side, I understand that you think we need to pay more money, let's sit together and let's hammer out some sort of deal that placates both sides.
PENNER: It has to be the mayor.
DONOHUE: It has – You would think it would be…
PENNER: Who else would it be?
DONOHUE: …the mayor. That's what we elected him to do. But to this…
PERRY: But that…
DONOHUE: …to this day, we haven't seen any sort of leadership from him.
PERRY: And that's the same problem Sacramento.
PENNER: All right, let's…
PERRY: When you get people at the polls, left and right, tax, no tax, very little middle ground, and certainly with citizenry, very little incentive to compromise.
PENNER: Let's go to Joyce in La Mesa now. Joyce, you're on with the editors.
JOYCE (Caller, La Mesa): Hi. I just listened to the discussion about building a new library, moving the city hall, and now we're talking about not having budget money. Every week, two weeks, a sewer main breaks, a water pipe breaks, the structure there is 50 to 75 years old. It all needs to be replaced. And they've talked about expanding the convention center, which does bring in a lot of money to San Diego but it isn't big enough for the really big conventions. It seems like we have all these projects that we think we're going to do out of the same money and then we aren't going to raise taxes, and I think we have to decide where the $80 million's going to be spent.
PENNER: Okay, let me turn to Ricky on that. Ricky.
YOUNG: Well, with the water projects, unlike general taxes, it's easier to raise water rates, which they just did to pay for some of those water projects. And with the convention center, you know, that was sort of chugging along but when they learned that it was going to cost $1.5 billion of new revenue that they would need over the next 30 years, I think that some people started to get weak knees on that. Some of the ways of paying for that like a, you know, a tax on zoo or Sea World admissions did not go over well.
PENNER: All right, so, Ricky, in the midst of all this grappling with budget reductions, we hear that despite a much publicized six percent pay cut at the city, it's not quite true. The housing commission is giving raises and bonuses, the convention center corporation is giving pay raises under union contracts, and the SEDC gave a 25% increase to its interim chief administrator. What's going on?
YOUNG: Well, one thing I have found interesting about San Diego City government is how much of it has basically been contracted out to nonprofit corporations, which is a structure I've not seen other places I've been in journalism. And these nonprofits are quasi-independent and some, the city has more control over than others. The mayor had asked all city departments, including these, to share in a six percent reduction in pay and benefits and you sort of saw which ones he has more control over than others. The Data Processing Corp did share in this but that's because they have a, you know, a giant contract for IT with the City that the City really could pull.
YOUNG: Some of the other ones the mayor does not have as much control over, and so you didn't see as much sharing of the pain.
PENNER: In the few seconds we have left, I'd like to get your opinions. Is it time to rein in those agencies and have them ascribe to the same kind of rules and regs that are being set up for the rest of the city?
DONOHUE: …I mean, most – a lot of them do. We, you know, Ricky said they were contracted out but, I mean, these are government agencies that have to follow all the government rules and so it just takes strong leadership, I think, to control them.
PENNER: Okay, final word, Tony. Short word.
PERRY: No. The Center City Development Corporation is one of the shining stars in an otherwise fairly mundane political structure here in San Diego. It's not time to rein it in.
PENNER: Okay. And you get the last word, Ricky.
YOUNG: Well, it'll just be interesting to see, moving forward, the last thing is whether the city council will take the six percent reduction in pay and benefits. They have until June 30th to get their changes in to the mayor's office.
PENNER: Well, we'll be watching. Thank you very much. Ricky Young, San Diego Union-Tribune, Andrew Donohue, voiceofsandiego.org, and Tony Perry, Los Angeles Times. Thanks to our listeners and our callers. This is the Editors Roundtable. I'm Gloria Penner on KPBS.