City expected to face two more years of budget shortfalls
SAN DIEGO (CNS) – The city of San Diego is expected to face two more years of growing budget shortfalls before fiscal conditions begin to improve, the mayor's office reported Wednesday.
The deficit for the next fiscal year, which begins on July 1, is now projected at $56.7 million, according to a presentation scheduled to be delivered to the City Council's Budget and Finance Committee.
The following year, the shortfall is projected to worsen to $61.9 million.
The trend line then begins to improve, with projected deficits of $54.9 million, $33.1 million and $8.8 million in successive years.
The report assumes no raises for city employees through 2016, inflationary adjustments only for utility costs, and only increases to expenditures made necessary by contracts, new facilities or council action.
However, the outlook does not include a forecast on how San Diego's finances might be impacted by legislative decisions at the state level, because of the uncertainty over what might happen in Sacramento.
According to the city's independent budget analyst, a proposal by Gov. Jerry Brown to phase out redevelopment agencies would result in a mix of positive and negative impacts on San Diego's budget.
The independent analyst also recommended that the City Council take a more pessimistic view of future property tax revenues, which in a worst-case scenario could result in revenues lowered by $21 million in 2016.
The city's budget picture in the current fiscal year has brightened by a $21 million lower-than-expected contribution to the employee retirement system, and slight increases in sales and hotel room taxes.
Committee members voted to pass the report on to the full City Council next week, adjusted to reflect recent action to shift Petco Park debt service payments to the Centre City Development Corp., which will save the general fund $11.3 million annually.
Councilman Carl DeMaio said the mayor's office also needs to present an accounting of deferred maintenance, which he called an “infrastructure deficit,” in a “public forum so our taxpayers can see it.”
The IBA has pegged the maintenance backlog at more than $800 million.
City staff has estimated that it would cost $564 million to return roads, storm drains and other municipal facilities to a high level of service. The proposal for the next fiscal year is to spend $86.9 million on maintenance.