San Diego’s Budget Solution on the Backs of Retirees and the Poor

Earlier this week, Jerry Sanders unveiled his budget proposal (full proposal here) for city council review and vote. The budget is, perhaps unsurprisingly, mostly a corruption of the notion of “fair” and revives the locally legendary magic budget fairy to close a $60 million gap. It’s a mess all around, but budget cuts unnecessarily target retirees and low-income city employees in the name of “fairness” and far too many are willing to roll over because it’s easier and deficits are scary.

$11 million in fees and $3.8 million from the Library Systems Improvement fund are, at first blush, relatively minor. But the rest of the $60 million will come from several eyebrow-raising locations. $17.8 million will come from a surprise rainy-day fund that nobody outside of the financial folks seemed to know about until recently (efficiency at its finest). As Councilmember Gloria noted, reflecting on a midyear budget vote to close 7 libraries and rec centers “I shudder to think what would have happened if the council consented to doing that only to find $17.8 million that is currently available.” The City Attorney tried to defend nobody having any idea about this money by basically saying ‘running a city is complicated’. It fell to City CFO Mary Lewis to defend the mayor’s office:

“In prior budgets, we were looking at how do we right-size the city,” Lewis said. “It was just a different policy discussion about the budget and balancing the budget.”

I mean, I suppose running a city is complicated. But I mean, if it’s your job…

The remaining $30 million would come from an across-the-board 6% paycut for all city employees from the mayor on down. You may be familiar with this concept under other names like flat tax, fair tax, increased sales tax, etc. Basically, a regressive financial hit cloaked in the guise of fair. Thing is, rent and utilities and food and gas and a thousand other things that people need in order to live don’t change in price based on percentage. So as has been explained a thousand times before, without allowances for cost of living, these sorts of cuts hit hardest those who make the least. Which is a problem for its proponents..

Mayor Sanders defends these proposed cuts- in the midst of negotiations with all five of the city employee unions- by insisting that the only other option is layoffs. Even leaving aside the credibility that’s lost when the Mayor’s office can just up and discover $17.8 million lying around that nobody knew about, this isn’t a black-and-white issue. Obviously cuts are necessary, but cuts that still drive city employees to seek government benefits to survive kinda defeats the purpose of… keeping current city employees from needing that support. CityBeat paid lip service to this while endorsing the budget proposal, largely under the apparent presumption that coming up with and passing an actual different, better budget would be too difficult.

But the punitive air involved here- both from the Mayor and from otherwise-reliable progressive sources like CityBeat- is troubling to say the least. The notion that the city unions negotiated TOO good a deal last time and that correcting deals that are now seen as overgenerous should trump putting the best policy forward. But that’s nothing new and demonstrates exactly WHY unions are so aggressive in contract negotiations. They know that at every opportunity, organized labor will be the first target for cuts. In this case, major cuts to retiree health care are coupled with regressive pay cuts because it’s apparently too much of a hassle to produce and pass a progressive budget solution.

But even more, it’s a sign of San Diego’s economic model. Tourism is such a dramatic and vital source of income for the city that perpetuating an internal economy that’s fundamentally dysfunctional is fine- just keep the beaches full and the Convention Center booked. Until city leaders commit to systemic changes to local budget structures, I suppose this is what we’re gonna get.