Wednesday, October 19, 2011

San Diego's Budget - Impact of Prop D Defeat

Last November's defeat of the half-cent sales tax measure, Proposition D, was supposed to be the warning shot across the bow that galvanized city leaders into drastic action to cut budget deficits. From the Citizen’s Fiscal Sustainability Task Force Analysis of FY2012 Budget Deficit:
In all frankness, the seeming absence of a sense of urgency demonstrated by the City leadership since the public’s November 2, 2010 rejection of Proposition D’s additional revenues as a deficit solution is disturbing. On November 3rd, the citizens of San Diego anticipated swift and aggressive actions from the City leadership to resolve what was advertised as a dire fiscal situation. With the prospect of $500 Million in new tax revenues coming from the passage of Proposition D, there was a commitment by the City to quickly implement the reforms articulated in our last report. Instead from November to December, little or no significant actions were taken by the elected officials to eliminate the Structural Deficit in 2012. When the 18 month budget was passed in December 2009, Councilman Young added an amendment requesting the Mayor present a plan by June 30, 2010 that would permanently eliminate the Structural Deficit. If Proposition D was that plan, then once Proposition D failed, it was anticipated that a new plan would be forthcoming. Instead, during the November Budget Committee meeting, when asked if the City would be developing a new mid-year budget to get a head start on new savings and reforms, City Management went on record indicating there were new positive economic results coming and a mid-year cut was not necessary (City Council Meeting November 11, 2010). In light of pre-election assurances by elected officials that Propositions D’s failure would result in drastic service and cost reductions, the decision to not address mid- year budget cuts given that Proposition D did in fact fail stands in stark contrast with these promised actions.
Almost a year later we get the following news report.
The San Diego city budget deficit for next year is shrinking and the future is a bit brighter with a projected surplus in 2017, according to the latest financial prognostications from Mayor Jerry Sanders Wednesday.
Maybe that's why the politicians didn't do much after the defeat of Prop D, they knew the situation wasn't as dire as they had claimed. But here is what Mayor Sanders had to say in 2010 about public safety if Proposition D was rejected.
Sanders says there will be significant cuts to public safety if Proposition D is rejected. “To date, we’ve spared them, by and large, but we don’t have a lot left to cut,” he said. “And there’s going to be some public safety implications, implications in terms of services throughout the neighborhoods.”
However, no such cuts materialized. Indeed, so the called fire station brown outs ended in July of this year. Clearly better not to listen to politicians asking for tax hikes to close budget gaps. Better to force them to reduce spending, it seems to work.

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