How the City of San Diego Could Survive Coronavirus Economic Crisis

The city is facing a coronavirus economic crisis but survived the financial market crash of 2008 after significant cuts

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San Diego Mayor Kevin Faulconer is projecting a $109 million loss in hotel and sales tax revenue through June due to the coronavirus and says tough budget decisions will soon have to be made.

But it’s not the first time City of San Diego leaders have been faced with the tough task of potential layoffs and cutbacks in service.

In October 2009, then Mayor Jerry Sanders projected a $179 million projected budget hole in the aftermath of the financial market crash. San Diego was also dealing with it’s infamous pension crisis, and also reeling from the 2007 wildfires.

Darren Pudgil was communications director for Sanders at the time. He draws comparisons to what Mayor Faulconer is facing.

“I think it is very similar to what happened then and what’s happening now. The issue to what’s happening now, is no one knows how long it’s going to last. How long are all these businesses and hotels going to be closed, how long are we not going to be collecting hotel tax revenue and sales tax revenue that feed into city services. That’s the big unknown,” said Pudgil.

It's too early to say what services will be cut as a result of the Coronavirus economic impact.

But in 2009, Pudgil said dozens of city department heads were asked to take a 27% cut across the board. Hundreds of city employees were laid off, and those that remained took a 6% pay cut, including the mayor and city councilmembers. And there were more cuts.

“We did reduce hours pretty significantly to our park and recs centers, and at our libraries, beach maintenance was scaled way back, if you remember, the fire rings, all the fire rings at the beaches were removed because we couldn’t afford to do maintenance on them,” said Pudgil.

While no sworn officers were laid off, Pudgil says there were administrative cuts within the San Diego Police Department and the departments mounted patrol unit was eliminated.

Pudgil says the city will have to look at potential cuts responsibly, while listening to the public and employees. He says in 2009, cuts were made as evenly as possible with as little impact on the public as possible.

“Hopefully some federal stimulus money will come in, the city has done a good job with building the reserves ovr the last several years while the economy has been good. Hopefully that will blunt some of the cuts that will have to be made,” said Pudgil

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