Be careful how you interpret the big announcement last Thursday from San Diego Mayor Jerry Sanders that the city’s “structural budget deficit” is kaput and some services that had been cut, such as library hours, would be restored.
Do you know the difference between the city’s “structural budget deficit” and the city’s bigger-picture “financial problems”? It’s significant.
The structural budget comprises the tax and fee revenue that comes in to the city on one side of the ledger and the cost of providing regular services to the citizens on the other. For at least the last 15 years, and maybe far longer, the cost of those services exceeded the revenue coming in to pay for them. What Sanders was announcing was that thanks to better-than-expected taxes coming in, due to an improving economy, the city now has enough money to pay for the services that it’s planning to provide.
Good news? Sure.
However, the structural budget doesn’t include a couple of big items: a long list of projects aimed at fixing a crumbling infrastructure that’s been neglected because there’s hasn’t been enough money, and the huge debt the city owes to its employee-pension fund. The city plans to sell bonds to raise money to chip away at the list of maintenance projects, and the mayor says there’s enough revenue coming in to pay the debt service on those bonds. And, he says, there’s enough money to afford the annual payments that are required to keep the pension debt from spiraling out of control—at least in the very short term.
We can’t help but wonder if Sanders and his staff had City Councilmember Carl DeMaio in mind when they decided to trumpet with considerable glee the death of the structural budget deficit. Laypeople were bound not to fully grasp the nuances between it and the broader financial picture, and they might walk away thinking that DeMaio’s precious pension-reform ballot measure is no longer necessary (it never was). Was Sanders trying to annoy his foil DeMaio even though the mayor, too, supports pension reform? We enjoy thinking so. DeMaio immediately started complaing that Sanders is being too rosy about the city’s financial condition.
As City Hall observers on Twitter have been trying to parse Sanders’ words, his staff has carefully clarified that the city is still in a financial tunnel, and while the mayor can see a light at the end, we haven’t emerged from it.
And that’s not only because of the maintenance and pension debts—it’s also because of what we’ll call a service debt. The city’s been shedding employees and shrinking services for years now. Only when we get a clear handle on the level of services citizens can reasonably expect from their government can we truly exalt amid an improved economic climate.
County officials earn good karma
In our Feb. 15 issue, Dave Maass told the story of Paul Fisk, who missed a chance to recover $744 that rightly belonged to him. He’d become homeless and was unable to pay the monthly fee for the storage unit holding his belongings. His stuff was auctioned off, and, unbeknownst to him, the county held a check for him for three years before absorbing it into its general fund in a process known as escheatment.
Last week, in an editorial, we pleaded with the county to find a way to get Fisk his money back. County Chief Administrative Officer Walt Ekard had told us that it wasn’t so easy—once Fisk’s money became the county’s money, handing it over would amount to an illegal gift of public funds.
On Monday, we found out that Fisk had been reimbursed, but it wasn’t exactly how we’d have scripted it. turns out that a number of county officials took up a collection and gave Fisk money out of their own pockets. Ekard initially didn’t want it reported; he said they simply were taken by Fisk’s story and wanted to help.
“Oh my god. I couldn’t believe it,” Fisk says of the moment the county contacted him through his lawyer. “I thought it was a bunch of B.S. at first. But it was true! I’m pretty happy.”
Kudos to Maass for bringing Fisk’s story and the larger issue of escheatment to light. And thank you to those anonymous folks in county government who dug into their own pockets to help someone out when they were under no obligation to do so.
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