Vincent Farnsworth 11:30 a.m., July 25
This Crisis Is New? The City Confessed Six Years Ago
On Friday, city council agreed to put a sales tax increase in front of the voters if several modest financial reforms are effectuated first. Mayor Jerry Sanders went along. It was big news: after all, Sanders had opposed tax increases throughout his incumbency. San Diegans and their media seem to have forgotten that the City admitted six years ago that even much stronger medicine than is now being proposed would be needed. It had warned, almost sotto voce, that revenue (tax) increases, pension benefit slashes and reductions of services would likely be coming.
In 2004, reformer Diann Shipione challenged information that the City had put in a bond prospectus. After some foot-shuffling, the City had to admit that it had been lying. So on January 27, 2004, the City filed a document with the obscure Municipal Securities Rulemaking Board, a quasi-governmental agency. The document confessed that the City could not continue making the pension payments it was scheduled to make.The key line: "The magnitude of the annual pension plan payments to be made by the City may be increasing in the near future and, WITHOUT NEW REVENUES or A REDUCTION IN THE PENSION BENEFITS PAYABLE BY THE CITY or other actions to enhance the funding ratio...these payments may become difficult for the City to fund WITHOUT REDUCTIONS IN OTHER SERVICES. (Emphases mine.) Services have already been slashed. There has been extremely modest progress in reducing potential future pension payments. The mayor and other politicians have demagogued the revenue and pension reduction issues. Now, after six years, the 2004 confession is being heeded, but only in a milquetoast way. Wasn't 2004 the time to act decisively?
More like this:
- Pension Costs Reach 69% of City Payroll, Says DeMaio — Jan. 19, 2010
- City Admits Error, To Include Information on Pension Overpayments in Documents — Dec. 5, 2007
- For City to Stave Off Bankruptcy, There Must Be Sacrifices — Oct. 20, 2007
- San Diego Today — Dec. 21, 2006
- Our Enron-Style Scandal — Feb. 5, 2004