SLO passes two-year budget 

The San Luis Obispo City Council passed a two-year $99.9 million budget at its June 21 meeting. The budget slashes capital project funding, relies on future significant employee union concessions, and eliminates more than 10 staff positions, mostly through retirements and leaving vacant
positions empty.

There are cuts in all departments, but the operating budget continues to grow. What are city residents getting in this budget? Of the $57 million that will be spent in next year’s general fund budget, $42 million will go to paying the city’s employees. Only $4.1 million will go to capital projects: the bread and butter of what city governments usually do, like bike trails, new roads, and parks. Over the next two years, the city will spend more on paying off its debt than it does on capital projects.

The budget was approved 3-2. This was hardly a surprise, since the council has been voting in a group of three in many of its recent, significant actions. What was a surprise was the makeup of the vote. In what may be the beginning of a more employee-friendly troika, councilmembers John Ashbaugh and Andrew Carter and Mayor Jan Marx voted for the budget. Council members Dan Carpenter and Kathy Smith voted against it, saying employees weren’t shouldering enough of the budget burden and rising fees were growing too expensive for many low- and middle-class residents.

Carter, who has established himself as a budget hawk, surprised many in the chamber by voting down an amendment by Smith that would have raised the amount of concessions demanded from employees from $2.6 million to $3 million in the operations section of the budget.

“I am comfortable with $2.6 million … it’s an appropriate compromise,” said Carter, who also cited the possible negative effects additional demands might have on employee morale. “It took us 10 years to get in this position, and I don’t think we have to do everything in one budget cycle.”

Only a month before, Carter had led the fight to squeeze even more concessions from the city’s employee unions. Along with Carpenter and Smith, Carter demanded the city staff increase concessions from the $2.1 million the staff initially suggested. The staff returned with the $2.6 million figure that ended up in the final budget.

“We lost our leader there,” said Smith, who not only voted against the budget, but also tried to introduce amendments that would have reduced water and sewer rate increases. Smith has lately taken up the cause of fixed-income residents who she says can’t afford many of the city fees that have been rising at a steady clip.

Though city staff and politicians say the budget is balanced, the city will be spending about $6.1 million more than it’s bringing in for the next fiscal year. The books are supposed to be more balanced in the second year of the budget cycle.

This budget requires employees to give up $4.5 million in concessions in the next two years to balance. With a city workforce already grumbling about existing pay freezes, that may be a tall order.

As with the last two-year budget, presumptions about outside factors may be wrong. Pension payments—an expense the city has no control over—may rise and throw the spending plan off kilter. The budget also presumes the economy will steadily improve, slowly filling the city’s coffers with cash.