SAN FRANCISCO - The San Diego City Council cut $37.3 million from the $1.19 billion general fund budget Monday, but lawmakers refused to slash popular city services like libraries and recreation centers.

Mayor Jerry Sanders earlier this month proposed $43 million of budget cuts to keep the city's fiscal 2009 budget in balance amid weaker-than-expected tax collections. The city expects a 4% shortfall in expected revenues this year on weakness in sales taxes, property transfer fees and property taxes.

The council passed most of Sanders' proposed cuts, but it chose to hike some user fees and to make one-time transfers to avoid cutting direct services to constituents.

"It's really hard to sit and look at people and say we are going to shut down things you hold near and dear," Councilwoman Donna Frye said at the council meeting "We can at least postpone it."

Sanders said the refusal to cut deeper will just make it harder to balance the budget next year. But San Diego independent budget analyst Andrea Tevlin recommended that the city delay the most draconian service cuts in favor of temporary measures that will allow lawmakers to spend more time deciding which programs to keep and which to cut in the upcoming 2010 budget year, which begins July 1.

"You don't make a decision like that after two weeks of discussion," said Councilman Tony Young. "The public expects its policymakers to really have informed, inclusive discussions in regards to very important institutions like libraries and parks."

The council approved the scaled-back package of cuts by a six-to-one majority. They agreed to a reduction in police and fire academy classes, elimination of more than 100 jobs, and mandatory furloughs for some employees.

The council rejected $5.7 million of the proposed spending cuts after residents packed council hearings to protest Sanders' plan to close nine recreations centers, seven libraries, and to reduce the number of fire crews the city keeps on duty. The council members also refused to cut discretionary funds they're allowed to use for projects in their districts.

The council agreed to instead spend money from unappropriated reserves and to raise fees. Sanders said in a press conference that the council had simply delayed inevitable cuts and pushed next year's budget deeper into the red.

"The impact of taking from reserves and restoring those programs is that a $44 million deficit we'd have had for FY 2010 has now become a $54 million deficit," the mayor said. "There will be no magic the next time around."

San Diego plans to issue bonds publicly for the first time in five years next year. California's second-biggest city has been closed out of the public bond market since a pension disclosure scandal in 2004. It has since revamped its financial management and disclosure practices, but like most California cities, it continues to struggle with a structural budget deficit and a growing unfunded pension liability.

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