San Diego Mayor Jerry Sanders and the City Council agreed to a $22 million package of budget cuts that partially close a $43 million mid-year gap in the $1.1 billion general fund budget for fiscal 2008-2009.

Sanders last month proposed $43 million of budget cuts that included the closure of 17 libraries and recreation centers. He initially vetoed the council’s smaller package of budget cuts after a dispute over $600,000 of cuts to neighborhood customer service centers and the firing of three city painters.

The Democrat-controlled council decided to spend unappropriated reserves — or extra money outside of the city’s official rainy-day fund — to save services, but the Republican Sanders said the refusal to make painful cuts would just make it harder to balance the budget next year.

Sanders and the council agreed late last week to a compromise that would close the customer service centers over the next year and save the painters’ jobs. The mayor, who lacked the votes for deeper cuts, had to accept spending some reserves.

The council and Sanders may have to negotiate bigger cuts and revenue increases to balance next year’s budget. The mayor and his finance officials predicted it will cost $54 million more than San Diego takes in next year to maintain services at their current level in the upcoming 2009-2010 fiscal year.

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