Economic Programs Spared Cuts : Austerity: Business-boosting programs escape ax in San Diego city manager’s proposed budget reductions.

Proposed budget cutting by the cash-strapped city of San Diego could could force as many as 178 layoffs among city employees, but the budget crunch evidently won’t force immediate reductions in several municipally funded economic development programs.

City Manager Jack McGrory on Friday said that an unexpected reduction in state funds and the city’s own budget shortfall will force the city to strip $18 million from the $1.4-billion budget for the fiscal year that began July 1.

Council members are scheduled to vote on McGrory’s proposed budget cuts at a special session Thursday.

McGrory’s proposed budget cuts, which leave city-funded economic development programs intact, “seem to have been driven by the recognition of the need for job-development programs in this economy” said Max Schetter, senior vice president of the Greater San Diego Chamber of Commerce.

As proposed, McGrory’s budget cuts would not change municipal funding for the chamber’s Economic Research Bureau, the chamber’s Motion Picture & Television Bureau, the San Diego Convention & Visitors Bureau (ConVis) or the San Diego Economic Development Corp. Each of the organizations that are charged with promoting San Diego and its economy would receive the amounts included in the budget that the council approved in the summer.

Council’s decision not to balance the budget on the back of economic development programs represented a dramatic change from three years ago, when the council threatened to dramatically cut funding for the chamber, EDC and ConVis.

During the current budget crisis, “anything having to do with economic development has escaped significant reductions,” Schetter said. “These are the organizations that are doing the spadework . . . planting the seed for job generation . . . and, Lord knows, having lost more than 38,000 jobs (in San Diego County) over the past two years, jobs should be our No. 1 priority.”

McGrory recommended that the council maintain $470,453 in funding for the EDC, $54,075 for the chamber’s research bureau and $373,118 for the motion picture operation. The city manager also recommended that ConVis receive $7 million in municipal funding, a slight increase over the $6.8 million previously budgeted for the current fiscal year.

But McGrory recommended that the council not use $2.9 million to fund a five-year program that would have bolstered ConVis’ marketing and advertising efforts in Europe, the Far East and the U.S. Eastern Seaboard.

“That ($2.9-million recommended cut) comes as no big surprise, given the price tag and the economy,” ConVis spokesman Richard Ledford said. “We’ll have to live without it. But our (marketing) efforts are cumulative in nature . . . a reduction in spending does have an impact.”

“I’m just delighted by the city manager’s recommendations,” EDC President Dan Pegg said. “I’m confident that we can, especially during these tough economic times, provide real value to the city . . . in the form of additional jobs.”