More cuts needed even as economy improves, officials tell west side residents
When officials came to the San Francisco Zoo Saturday morning, they brought a message for western neighborhoods: Brace yourselves for more cuts in services. But if they were hoping to come away with ideas from ordinary residents about what to cut and what to keep, there were few to be had at a meeting where most questions and comments came from service providers and unions.
The mayor and the Board of Supervisors will have need for good ideas as they look to eliminate a budget deficit that stands at $306 million and is in danger of growing if state and federal cuts for local programs materialize as expected.
The challenge ahead
Mayor Edwin Lee, Supervisor Carmen Chu of District 4 and Supervisor Sean Elsbernd of District7 held the town-hall meeting Saturday morning at the zoo. Directors of City departments including the Police Department, the District Attorney’s Office, the Department of Public Works, the Municipal Transportation Agency, and the Recreation and Park Department attended to talk about the challenges their agencies face.
Those challenges are significant – even though, as Budget Director Greg Wagner of the Mayor’s Office pointed out, the overall city budget is $6.5 billion and City revenues are starting to recover from lows reached in the recent recession.
One reason is that more than half of that $6.5 billion is not not available to move around, consisting of the budgets of “enterprise” departments such as the airport, which are expected to generate their own revenue to fund their operations. Of the remaining $2.97 billion – the “General Fund” – much is committed to various programs that would be difficult to alter, including programs whose spending is protected by mandates approved by voters.
Only about a quarter of the General Fund is broadly flexible, with about 75 percent of the General Fund going to the Department of Public Health, the Sheriff’s Department, the Police Department, the Human Services Agency and the Fire Department.
How to close the budget gap
If so much of the budget is beyond easy reach of the Board of Supervisors and the mayor, how then can the City close that $306 million gap?
One way is through more cuts to the departments that rely on the General Fund. Lee has asked City departments to propose either new cuts or new sources of revenue equal to 10 percent of the funding they already get from the General Fund, and to have have cuts of 10 percent more ready to go if needed.
But even if departments made all those cuts of 20 percent, it would reduce the budget deficit only by about $180 million, according to Wagner. So the mayor and some supervisors are seeking to make up a big chunk of the rest in an area where the City’s costs are growing far faster than revenue: employee pay and benefits.
“A great part of the $306 million-dollar gap has to do with a runaway pension system,” Lee said.
San Francisco has existing contracts with its employee unions to provide generous health and pension benefits, partly reflecting the economic optimism of just a few years ago, when the City’s investments did so well that future retirement-benefit obligations were fully funded. With the national recession, however, the value of those investments plummeted as benefit costs rose.
While Lee said that pension benefits due to employees were a big problem for the City and noted that he hoped to bring a reform measure to the November ballot, he gave an apparently conflicting reply to one of the meeting’s only comments from a resident of District 7.
Paul Simpson stood at the back of the zoo’s Great Hall and challenged officials about how committed they were to reducing the City’s employee costs.
“Everyone talks about a partnership with labor. That partnership is dysfunctional,” Simpson said. “Is there anyone here who’s willing to stand up and say organized labor is killing us?”
“I don’t share the same view,” Lee responded.
“I’m not about to have a Wisconsin kind of viewpoint here,” he said, referring to efforts in that state to greatly reduce the pay and benefits of public employees.
Like Simpson’s question, most of the questions and comments from the audience addressed broad citywide issues rather than the specific needs of San Francisco’s western neighborhoods. The majority of questions from the audience, even from people who said they were residents of District 4 or District 7, addressed broad citywide issues ranging from employee overtime costs to acute mental-health services to funding for in-home health care workers. One man who identified himself as a Muni employee challenged Elsbernd and MTA Director Nat Ford to a debate with Muni drivers over issues facing the transit system.
Next steps for San Francisco’s budget
- Lee and District 1 Supervisor Eric Mar will hold a town hall meeting on the budget at 6 p.m. April 27 at the Richmond District Recreation Center, 251 18th Ave.
- The mayor must present a balanced budget proposal to the Board of Supervisors by the first work day in June.
- The Controller’s Office reviews the mayor’s budget and issues an analysis in mid-June of whether the mayor’s revenue projections are reasonable.
- The supervisors study and hold hearings on the draft budget through June, then send a revised balanced budget back to the mayor. If the mayor agrees to the changes, the board is expected to adopt a final budget at the end of July. The last regular meeting of the Board of Supervisors in July is Tuesday, July 26.
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