After months of grappling with a sudden gap between projected revenues and spending, San Diego Mayor Kevin Faulconer Thursday released his proposed $3.6 billion budget for the fiscal year that begins July 1.
After several good financial years, city financial officials found themselves confronted with a $81 million shortfall, largely due to a much larger required contribution to the San Diego City Employees Retirement System that is expected to overwhelm revenue increases. The jump is the result of decisions made by the SDCERS board in light of retirees living longer and a mediocre investment performance.
The mayor said his plan prioritizes core community services in the $1.4 billion general fund like street repairs, recreation centers, libraries and public safety. The proposal also includes the largest infrastructure expenditure of this decade at $445 million, he said.
"We've made so much progress over the past three years to invest in all of our neighborhoods, and this budget plan keeps the focus on key services the City Council and I have worked hard to restore," Faulconer said.
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"Even though pension costs are taking a bigger chunk out of our bottom line I am going to keep my promise to put our neighborhoods first," he said. "This balanced budget takes a fiscally responsible approach to ensure we keep our libraries and rec centers open, continue our march to repair 1,000 miles of streets and provide hundreds of millions for infrastructure projects."
He said the budget plan funds 349 miles of street repairs, and maintains library and recreation center hours.
Other departments, however, will be impacted by a spending reduction of $22 million. Among the larger reductions was funding for arts programs, which the mayor proposing cutting by $4.7 million. That would give arts about $10.4 million, or less than half the funding called for under the "Penny for the Arts" plan to spend 9.5 percent of the city's hotel room tax revenue on arts and culture.
Faulconer supported the plan as a councilman in 2012. Asked if the plan was wishful thinking, Faulconer said no.
"I think any time that you put a roadmap onto how you can increase services, and particularly in arts, it's a good thing," he said. "You do that with the reality of the budget that you're faced with. That's what we've done this year."
Faulconer's proposal mitigates the cuts with an anticipated $8 million surplus for the current fiscal year, as well as $16 million from a pension stabilization reserve.
"Based on my briefing with the mayor, I am confident that we will finalize a strong (Fiscal Year) 2018 budget that prioritizes core community services," Councilwoman Barbara Bry said.
"As chair of the Budget Review Committee, I want to ensure that the public is actively engaged in the budget review process," Bry said. "It is critical to involve the community in these important decisions during this challenging fiscal year."
The spending plan will be presented to the City Council on Monday. The council members are expected to comb through the budget in May and adopt it in June.
Faulconer proposed a $3.3 billion budget for the current fiscal year, while planned spending for the year before totaled $3.2 billion.
