Filner Urges Lower Expectations for San Diego’s Budget

Worst case scenario estimates $37 million deficit by 2014

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    Despite the sunny budget projections of former Mayor Jerry Sanders, San Diego could be looking at a $37 million deficit by 2014.

    In September, Sanders said the city could have a surplus of about $5 million by next year. He made plans to increase library hours, restore public services and repair some of the city’s infamously crumbling streets.

    Filner Urges Lower Expectations for San Diego's Budget

    [DGO] Filner Urges Lower Expectations for San Diego's Budget
    Despite the sunny budget projections of former Mayor Jerry Sanders, San Diego could be looking at a $37 million deficit by 2014. (Published Wednesday, Dec. 19, 2012)

    However, on Wednesday Mayor Bob Filner advised San Diegans to lower their expectations for what the city can provide in the coming years. He said a mix of three factors could critically alter the city’s budget projections.

    “We’re not going to cry wolf, but we are gonna try to be honest about the budget,” he said.

    Filner summarized the three factors in a press conference Wednesday and outlined a basic plan of action. He showed a chart with the worst-case scenario of a $37 million deficit so that people could have “expectations based on facts,” he said.

    First, dismantled redevelopment agencies could send the bill back to the city from projects such as Petco Park. The state Department of Finance has yet to determine which projects the city will have to pay for, but Filner said the city will likely have to take up $14 million in annual payments for the bonds used to construct Petco Park.

    Another potential “land mine,” as Filner said, is the increased cost of funding the city’s pension system. The city’s retirement service will see a decreased rate of return for next year due to fewer people contributing to the pension fund.

    While last year the city’s annual pension payment was projected to be about $231 million, the city could in fact pay up to $276 million, Filner said.

    “Some of that was built into the budget and some of it was not,” Filner said of the payments.

    The third possible expense would incorporate lost state dollars as a result of Propostion A, which bans project labor agreements on city construction projects. Voters approved the measure in June, just after Gov. Jerry Brown signed a law that would take away funding from local governments which have such PLA bans.

    Filner said he is currently negotiating with Gov. Jerry Brown’s administration to define how exactly the state law will be interpreted. He said he is using whatever leverage he has as a fellow Democrat to appeal to Gov. Brown and his administration.

    As for what the city may lose if the worst case scenario comes true, Filner didn’t specify. He hopes to use some of the money from an SDG&E wildfire settlement for public safety projects, such as a new police communication system.

    The gains in library hours, public safety officers and street repairs will not go away quite yet, but any hope in additional gains should be dampened, Filner said.

    “I hope it doesn’t get to this,” he said, pointing at the worst-case scenario, “but I don’t want people to have expectations that may be too high.”