City Beat

Deep divisions emerge as Sacramento City Council approves budget 6-3

Sacramento City Council members Allen Warren, left, and Steve Hanson, conferring after a May council meeting, were on opposite sides of the city’s budget debate, with Warren supporting it, Hansen opposing.
Sacramento City Council members Allen Warren, left, and Steve Hanson, conferring after a May council meeting, were on opposite sides of the city’s budget debate, with Warren supporting it, Hansen opposing.

There was little room for compromise in the budget debate that dominated Tuesday night’s City Council meeting: What some hailed as a fiscally responsible spending plan that gives the citizens of Sacramento what they want, others called reckless and self-serving.

The budget, which totals about $974 million and includes nearly $30 million in new spending, was approved in a 6-3 vote. Those who voted “no” were Eric Guerra, Jeff Harris and Steve Hansen, who announced his intentions online hours before the vote.

Among the issues most hotly debated: five new staffers for the mayor’s office, the addition of which would increase Johnson’s staff and spending by 70 percent, and making long-term commitments, like new hires, with Measure U money, intended as a temporary tax hike that voters approved in 2012.

Deficit or nah?

Mayor Kevin Johnson opened the budget discussion Tuesday by assuring his colleagues that Sacramento “won’t see a deficit at all” after Measure U expires in 2019. Others issues that could lead to a budget shortfall – labor costs and pensions – are being dealt with, he added.

“I want to make it clear that this budget is fiscally responsible,” Johnson said.

The new budget taps Measure U funds to hire additional firefighters, police officers, and parks workers, in addition to paying for one-time fixes and programs.

That fund should continue to bring in about as much as the city is expected to spend with its current commitments, said city finance director Leyne Milstein. But as the tax sunsets, he said, the city will increasingly need to look to its reserves to fill a budget gap. By 2019, the reserves are expected to dip to $18 million, while the city will have more than two and a half times that amount of expenses to cover.

The city’s general fund is projected to enter an $8 million deficit by fiscal year 2017-18. General fund reserves will be about $34 million as of July 1.

The supporters

Councilwoman Angelique Ashby, who led the charge last month to amend the budget to include more staffing and an additional firetruck and ambulance in Natomas, criticized her colleagues for picking the budget apart “item by item,” saying that wasn’t fair.

“It’s a bit of a fear tactic to say that a couple of years from now, we won’t have any money,” she said, noting the city’s reserves are bigger than they have been in years.

Allen Warren said a growing economy should mean Sacramento can rely less on the temporary tax hike in coming years.

“The economy is improving, therefore, if we stay on course, the revenues should allow us to sustain, just like they did prior to Measure U,” Warren said. “The investments we make will pay dividends.”

Jay Schenirer defended how Measure U was being used – largely to restore police officers, firefighters and park workers who were fired during the recession.

“People overwhelmingly voted for Measure U, and they voted for it to restore services,” Schenirer said. “I think people are satisfied with how we’re spending the dollars.”

Rick Jennings enthusiastically supported the budget, saying “this budget is fiscally responsible and I’m excited to support it.”

Larry Carr said though he didn’t agree with everything in the budget, including the council’s reliance on Measure U, there is “more I agree with than the things I don’t agree with.”

Moments before the final vote was taken, Johnson made a final appeal to those who said they would not support the city’s spending plan. He also explained the rationale behind growing his office, a move that has been widely criticized: “I believe very strongly that these positions will help Sacramento get more resources at the end of the day,” Johnson said.

“If I didn’t believe that would be the case, then I wouldn’t do it,” the mayor said. “You can’t have it both ways. Originally I raised money on the outside to get more resources, more staff. I got criticized. So then we do it through the budget process; I get criticized this way. That’s leadership, I get it. I don’t mind that, but what I want to be held accountable for is do these positions give Sacramento more resources? And that’s what I believe we’ll be able to do.”

The detractors

Jeff Harris said he did not believe the budget’s promises could be kept long-term without extending Measure U, which he felt would be contrary to what taxpayers voted for when the temporary tax hike passed.

“I don’t think this is structurally sustainable, and I don’t think this body is working hard enough to save money every place we can,” he said. “I think it’s disingenuous to create a budget and then go to the voters in 2019 and say, ‘Well, if you don’t re-up Measure U, we’re just in a world of hurt.’ ... I’m not willing to go there.”

Steve Hansen also cautioned against relying on a fund that is not guaranteed to exist in five years.

“There is no guarantee that Measure U will be renewed, but this budget backs us into a corner on that issue,” Hansen said. “We'll have no choice but to go back to the voters and ask them to renew this.”

Eric Guerra criticized the mayor’s addition to his staff and said the budget spends money in the wrong places.

“I can’t support a budget that continues to divert funds out of the neighborhoods and into city hall staff,” Guerra said.

Marissa Lang: (916) 321-1038; @Marissa_Jae