When San Diego City Manager Michael Uberuaga released the city’s fiscal year 2004 budget on May 5, the stack of papers in his hand may have been a little lighter than usual. Missing from the budget are some $30 million in services that have been axed in the face of leaner-than-expected revenues.
Though budget cuts are always hard to make and hard to cope with, San Diego should consider itself lucky. The cuts have been made with care and consideration, and the shortfall is smaller than it could have been, due to the continuing strength of our local economy.
Many of the effects of the new budget cuts are quite minimal. The operating hours of libraries and recreation and community service centers will be reduced. It may take the city longer to respond to graffiti complaints. Some summer camp and youth activity programs may have to be discontinued.
While all of this is a shame, it’s exactly these sort of programs — the perks born of economic booms — that should be the first to go in times of shortfall. It’s also good news that the cuts have been spread more or less evenly around all of the city’s operations. It is better for all services to experience a slight decrease than for certain areas, like police or fire departments, to take a big hit.
There are certainly more dramatic repercussions of the shrinking budget, including over 100 layoffs and even more positions remaining unfilled in a continuation of the hiring freeze the city’s had in effect since it became apparent that finances would soon be a problem. However, the hiring freeze may very well be a boon to those who would otherwise be out of work: Attempts will be made to reassign laid-off workers into now-vacant positions within the city. Though this may result in demotions and lower pay, that’s certainly better for workers than unemployment.
Furthermore, that the city is making good on its promised raises and added benefits for city employees — $20.7 million is going to pay increases, $11 million to retirement funds and $5.8 million to worker’s compensation — shows how much the city values its employees. Other agencies, such as the University of California, have shown that not all who are cash-strapped are willing to keep wages rising.
San Diego has been immune to many of the ups and downs that have plagued other areas of California. The presence of military installations, the defense industry, high-powered universities, well-established biotechnology companies and a tourism draw that just won’t quit has protected us from the dot-com bust and may in fact improve our standing while others’ economies stagnate.
Perhaps the most heartening fact in Uberuaga’s budget presentation was that revenues are actually increasing in the city, just not by as much as expected: Ordinarily, revenue would be expected to rise by $60 million, and this year the increase was $10.5 million — significantly lower but still an indication that the local economy is growing healthily.
The picture is much worse elsewhere. In San Jose, Calif., for example, their local revenues have actually declined 17.8 percent, according to the San Francisco Chronicle, and as a result, lawmakers have cut $77 million from the city’s $42.5 billion budget and will raise city fees like recycling and garbage that could hit families for hundreds of extra dollars a month. It is a sad irony that San Jose, once at the forefront of the tech boom that propelled California’s late-1990’s economy into the stratosphere, is now at the center of the tech bust and can’t afford tree trimming or road repaving.
And of course there’s California’s state budget crisis. The multibillion-dollar shortfall has prompted Gov. Gray Davis to authorize a $1.8 billion general fund bond, an unprecedented move, since such bonds are typically only allocated through voter approval. A tax hike seems inevitable, whether it comes now or later, for even the Republican’s plans of taking out an even larger $10 billion bond to prevent immediate tax hikes will need to be paid back somehow.
State funding shortfalls will undoubtedly have an effect on the city’s budget sooner or later. Uberuaga said reductions in funds the state generally allocates to cities and counties could be “”very severe”” and have a more dramatic effect on San Diego’s 2004 budget. However, because our economy has remained relatively healthy, we may still avoid the shortfalls seen in many other cities around the state.
All in all, it’s clear that San Diego is getting one of the mildest treatments in the state as far as financial shortfalls are concerned. Uberuaga’s and Mayor Dick Murphy’s intelligent cuts have put the city on stable footing.
