Financial outlook says no city fiscal-year budget surplus for 5 years
City News Service
It will be five years before the city of San Diego heads into a fiscal year with a projected budget surplus, according to a financial outlook delivered today to the City Council’s Budget Committee.
The finding by city financial management staff means the mayor and council members will have to find ways to cut spending or increase revenue when planning each budget until Fiscal Year 2017.
The report projects a deficit of $31.8 million headed into the next fiscal year, which begins July 1. That’s $9.3 million less than originally forecast, according to the outlook.
The projected shortfall climbs to $36.6 million the following year and drops in subsequent years to $28.1 million and $5.6 million. The five-year forecast ends with a $22.7 million surplus.
keep things in context,’' San Diego is better off than other large cities in California, which project larger deficits, according to Councilman Todd Gloria, the committee chairman.
He said a competitive bidding program for city functions, lower retirement contributions and other savings will help the city close next year’s shortfall without solely relying on service cuts.
The report notes that actual revenues will be dependent on the health of the economy.
Under an optimistic scenario in which property and sales tax revenues soar and travelers flock to San Diego hotels, the projected deficits could be eliminated one year earlier. The report does not assume additional income generated by the expanded San Diego Convention Center, which, if completed on time, could provide additional money for city coffers.
The pessimistic scenario presented in the report suggests that shortfalls would continue into the foreseeable future. Those would hit $55.1 million in three years, and the projected 2017 surplus could instead turn into a $25.9 million deficit.
The committee voted unanimously to forward the report to the full City Council next month. The city’s Independent Budget Analyst plans to issue its critique of the outlook at that time.