Report: City can expect budget deficits until 2017

SAN DIEGO (CNS) – It will be five years before the city of San Diego
heads into a fiscal year with a projected budget surplus, according to a
financial outlook delivered Wednesday to the City Council's Budget Committee.

The finding by city financial management staff means the mayor and
council members will have to find ways to cut spending or increase revenue when
planning each budget until Fiscal Year 2017.

The report projects a deficit of $31.8 million headed into the next
fiscal year, which begins July 1. That's $9.3 million less than originally
forecast, according to the outlook.

The projected shortfall climbs to $36.6 million the following year and
drops in subsequent years to $28.1 million and $5.6 million. The five-year
forecast ends with a $22.7 million surplus.

To “keep things in context,” San Diego is better off than other large
cities in California, which project larger deficits, according to Councilman
Todd Gloria, the committee chairman.

He said a competitive bidding program for city functions, lower
retirement contributions and other savings will help the city close next year's
shortfall without solely relying on service cuts.

The report notes that actual revenues will be dependent on the health of
the economy.

Under an optimistic scenario in which property and sales tax revenues
soar and travelers flock to San Diego hotels, the projected deficits could be
eliminated one year earlier. The report does not assume additional income
generated by the expanded San Diego Convention Center, which, if completed on
time, could provide additional money for city coffers.

The pessimistic scenario presented in the report suggests that
shortfalls would continue into the foreseeable future. Those would hit $55.1
million in three years, and the projected 2017 surplus could instead turn into
a $25.9 million deficit.

The committee voted unanimously to forward the report to the full City
Council next month. The city's Independent Budget Analyst plans to issue its
critique of the outlook at that time.

Categories: KUSI