NO EASY FIXES FOR SAN DIEGO’S BUDGET WOES

The city of San Diego’s $1.7 billion general fund budget pays for everything from parks and libraries to police officers, and it’s been balanced of late with nearly $200 million in federal pandemic aid. Now a five-year budget outlook for the city of San Diego released this week amounts to a grim reminder that its finances are fundamentally weak.

It projects a $98 million deficit in fiscal year 2023, a $143 million deficit in fiscal 2024, a $137 million deficit in fiscal 2025, a $121 million deficit in fiscal 2026 and an $87 million deficit in fiscal 2027. And the red ink is expected despite projections over five years of a 29 percent rise in property tax revenue, a 26 percent increase in sales tax revenue and a 58 percent jump in hotel room tax revenue.

Yes, the latter two categories were pushed down by pandemic restrictions over the past 20 months and so the increases are less dramatic than raw numbers indicate. But it’s telling that such large deficits are forecast when the local economy is expected to have fully recovered from the pandemic.

The report would have been less gloomy if Mayor Todd Gloria didn’t seek to make it more honest by having it include anticipated worker raises of 3 percent per year, which wasn’t done in past reports. It would have also been less gloomy had state mandates not required San Diego to spend about $80 million a year on new clean water and green recycling efforts. And it’s possible that the red ink could be limited by potential ballot measures to impose a parcel tax to help pay for storm water projects and to overturn a law barring residential trash pick-up fees. But Gloria and the City Council can’t assume voter support and must have contigency plans.

The five-year outlook includes about $50 million a year in funding for the mayor’s goals of improving quality of life in the city by more quickly removing graffiti, abandoned vehicles and trash in parks and fixing potholes. Yet as worthy as these goals are, abandoning them to reduce deficits may be seen as low-hanging fruit in budget negotiations.

Unfortunately, such cuts wouldn’t come close to bringing the budget to balance, especially since the report doesn’t include the millions the city is going to have to pay annually going forward because of courts’ rejection of the 2012 ballot measure ending defined-benefit pensions for new hires. So fans of parks and libraries, watch out. Their hours are traditional targets of budget cutters. Other services are likely to be reduced as well because of hiring freezes.

The state law requiring cities to have balanced budgets makes sense. But the pain it causes is real.