SAN DIEGO — Somewhere in tax-fighting heaven, Howard Jarvis must be spinning.
The city that the late sponsor of Proposition 13 once extolled as nonpareil in its stewardship of public money ("If all cities were run as well as San Diego, we wouldn't need Proposition 13") is now caught in a financial crisis of colossal proportions.
Not one caused just by a downturn in the economy, although it has that feature. Not one caused just by a bad deal with a pro football team, although it has that, too.
Not even one caused mainly by a severe cutback in state support, although that's part of it as well.
No, San Diego's financial problem is largely of its own making. By underfunding its public employee pension program, the city is now so deeply in the red, critics assert, that without drastic action, pension payments will virtually suck the treasury dry.
Wall Street has lowered the city's bond rating. Moody's now rates the city's general obligation bonds at Aa3, the same as San Francisco and -- embarrassingly for San Diego leaders -- one level below Los Angeles. The lower rating potentially will pile on hundreds of millions of dollars in additional interest costs for building projects.
The city's pension program has an unfunded liability -- a shortfall -- of $1.157 billion and growing. Add the bill for medical care for retirees and the tab goes up another billion or so.
"San Diego is in a real mess," said Scott Barnett, former executive director of the San Diego County Taxpayers Assn. "All the bad financial news is coming together at the same time, and the city is facing a load of hurt."
When the booming stock market made the city's pension accounts flush, San Diego officials sweetened benefits for city workers. Then the market crashed and they were left with much less money in the bank and bigger bills coming due.
Lots of other California cities and counties have similar problems, but this is San Diego, where fiscal conservatism was thought to be the civic religion.
"We found that the emperor has no clothes," said Carl DeMaio, executive director of the San Diego-based Performance Institute, a Libertarian think tank, studying the city's budget and budgeting process.
The crisis arose quickly -- one study points to 2000 as the key year -- but could take decades to resolve even if the City Council is forced to make painful choices.
