Gloria, Fletcher each face different fiscal circumstances

San Diego’s new leaders, Todd Gloria and Nathan Fletcher, have declared they will lead by breaking from the past, but their ability to do so will be influenced by their predecessors in very different ways.

Mayor Gloria has pledged to set the city on a more aggressive course in tackling homelessness, providing affordable housing, pursuing social justice and equity, and combating climate change.

In pursuing those goals, he will be challenged by a budget shortfall, increasing pension costs, a disastrous real estate deal and longterm uncertainty over how the city will get its electricity.

All of that was left over from the tenure of former Mayor Kevin Faulconer.

Fletcher, chair of the county Board of Supervisors, has launched the county toward a more expansive role of governing regarding the COVID-19 pandemic, spending decisions, and social justice and race relations.

The overarching goal is to distribute county resources and services more equitably to lift up historically underserved communities.

The new Fletcher-led Democratic board majority will be facilitated in achieving its objectives, in part, by the tight-fisted ways of the previous Republican-controlled board that left the county in good financial shape — and with money to spend. Former Supervisors Greg Cox and Dianne Jacob, who were termed out of office last year, had a lot to do with that.

Both Gloria and Fletcher consider themselves progressives and share similar political philosophies. Their governments do not share the same fiscal health.

“We are facing a significant financial crisis here,” Gloria told The San Diego Union-tribune editorial board on Thursday. “I mean, the budget deficit is enormous and is growing.

“Our finances remain strong,” Fletcher said in an interview last week.

The county still has problems. It is the lead local agency responding to COVID-19 and the effort to combat the pandemic at times has been balky, including a slow vaccine rollout that has been a concern statewide. However, more

vaccines are coming and another vaccine “super station” was just opened.

The number and regularity of inmate deaths in county jails has been a growing controversy, as has the level of medical care for those incarcerated. The supervisors have begun to address that.

The new board majority also is moving to undo policies from previous boards that Fletcher said limited the county in providing certain services to residents. For example, he said the county has an arbitrary cap on the number of health and human services employees per capita. He said that gets in the way of expanding health care and mental health services, one of his top priorities.

Public safety agencies don’t have that kind of restriction.

Decades ago, the county almost went bankrupt, and new supervisors at the time — including Cox and Jacob — focused on making sure that didn’t happen. Over the years, they not only righted the financial ship, but built up huge reserves in the neighborhood of $2 billion.

When Fletcher ran for supervisor in 2018, he was critical of the board sitting on so much money while needs of county residents — particularly at the lower end of the economic scale — went unmet.

“They’re not there to look at and admire,” he said in the interview, referring to large reserves.

The previous board did loosen the purse strings over the last couple of years — in part motivated by Fletcher — on mental health services and other programs, and ramped up spending to deal with the pandemic.

Fletcher said his approach does not mean emptying out the county treasury. He served in the state Assembly during the Great Recession and in the aftermath as the state was climbing out of a catastrophic budget hole. He said he was “scarred” by the experience.

“I never want us to return to that,” he said.

Gloria also wants to do a lot of things to implement his vision. Having more money to spend would help.

The recent election bolstered the Democratic majority on the nine-member council, which now has only one seat filled by a Republican, Chris Cate, who was recently named chair of the council’s budget committee.

The Democratic mayor’s political views may be more in line with the majority, but he may have to rely on Cate to help hold the line. The council members have released their budget priorities and they’re talking about increasing, not reducing, spending for programs for youth, business pandemic aid, Internet access for the poor and raises for city workers.

The council members, and Gloria, made a lot of promises during the recent election campaign, and now their supporters will expect them to produce.

The city had built up some reserves under Faulconer, but that won’t solve the problem and Gloria already is calling for budget cuts.

The city now has “a projected $154 million deficit, which is nearly double the $86 million shortfall projected in November,” according to David Garrick of The San Diego Union-tribune, who noted that’s “roughly a 10 percent gap in the city’s annual operating budget of $1.5 billion.”

San Diego officials, like local and state governments everywhere, hope they will

get financial relief from Washington to offset the impacts of the pandemic.

Much of the city’s shortfall results from the COVID economy, particularly the lack of revenue from tourism. But the city also learned that it must pay $50 million more than expected to cover pension costs.

Beyond that, a judge recently invalidated Proposition B, the 2012 voterapproved initiative that did away with pensions for new city employees and replaced them with a 401(k)-style program. Other courts also have ruled against Proposition B and Gloria said it’s time for the city to move on and stop spending money on continued appeals, as Faulconer did.

But unwinding the measure will be time-consuming and, ultimately, costly.

The Gloria administration also must pick up the pieces of the city’s leasepurchase agreement for a high-rise office building at 101 Ash St. The troubled real estate deal engineered by Faulconer, and initially supported by Gloria, threatens to become a legal quagmire and financial black hole for the city.

Meanwhile, the city’s effort to negotiate a new energy franchise pact that has long been held by San Diego Gas & Electric has been set back almost to square one.

Gloria is leaning into the future, but he’s going to spend a lot of time dealing with the past.

No doubt he’d like to have admirable big reserves to help with that.

Tweet of the Week

Goes to Matt Oswalt (@Mattoswaltva), actor, on Inauguration Day.

“I feel like Marty Mcfly opening the garage and finding a brand new truck.”