The City of Chula Vista has a problem controlling its spending. The City has been spend-ing above revenues coming in, creating a structural spending deficit. For years the city has gotten away with this by tapping into the city’s reserves to balance the budget. In this fiscal year, the City used a one time fund of $5 million to trim its $9 million deficit to $4 million. In previous years, the city might have gotten away with deficit spending because revenues were steady and predictable, but with the housing market crashing around us coupled with the worst recession in memory, budgetary turkeys have come home to roost.
From 2002 to 2006, the city of Chula Vista spent $21 million dollars more than they took in. But those were the good years. Housing values were skyrocketing and deficit spending was sold as investment in the future. The city significantly increased its debt, pension liability, salaries and payroll. But in 2006, city manager Jim Thompson implemented a hiring freeze to save the city $5 million dollars, in attempt to forestall inevitable problems.
In 2006, city councilmembers John McCann and Steve Castaneda, newly elected Rudy Ramirez and Mayor Cheryl Cox, who campaigned on the budget issue, were well aware of the deficit and that someday it would require spending cuts and/or a tax increase. That day has finally come. In May, the voters of Chula Vista will be asked to approve a sales tax increase of 1 cent more on every dollar spent in Chula Vista so the city can continue funding city services.
Without any means to generate new income, the city council of Chula Vista has fired 165 full time employees. This year, 135 additional employees may be asked to leave city employment. Most of the remaining city employees agreed to forego pay raises. The City still needs to find $4 million more dollars to balance this year’s budget. But that is not the worst of it. Next year’s projection anticipates a $20 million dollar shortfall without a 1 cent sales tax increase.
Now that the city finds itself between a rock and hard place, will they continue to make cuts in services such as internet, pools, Nature Center, libraries, staffing, pay raises, pensions, etcetera, or raise taxes? The City council decided at their January 20 meeting to put the burden of making the decision on the voters do you want services cut or do you want to pay more in taxes? Mail ballots will be sent out starting in April with a May 5 deadline to mail back ballots.
This 1 cent sales tax increase will be a topic of discussion that we will explore and consider in the next two months.
While we have heard plenty of voices for the Nature Center, the libraries, and the police, there have been few voices speaking up for the low-income and the poor who will suffer the most under an increased tax burden.
More to come…