SF Mayor’s Approach to the Budget Crisis
is to Shred the Social Safety Net
Jennifer Friedenbach, of the Coalition on Homelessness, spoke at a February 17 2009 meeting of the SF Gray Panthers. She works with Coalition on Homelessness, which tries to find permanent solutions to poverty and homelessness. She has been involved with the budget in San Francisco for twelve years, with the People’s Budget Collaborative for nine years, and is now working with the reconstituted Coalition to Save Public Health, a three-way collaboration of City and non-profit workers providing services, people facing massive health cuts, and their advocates. These are detailed notes from her talk.
This year’s budget deficit is huge because of the recession. San Francisco basically has unreliable revenue sources: the real estate transfer tax, tourism tax, and sales tax. All are down, but the real estate transfer tax, normally the biggest source of revenue, has come to almost a complete halt because much of it was from the transfer of large commercial buildings — which has stopped.
The city normally has a budget of $6 billion, most of which is non-discretionary (meaning it must be spent on specified Federal, State, or City programs or set-asides, or other requirements). About $1 billion would normally be left in discretionary funds, meaning the City can decide how to use it. The revenue shortfall anticipated for 2009-2010 is $576 million, meaning that if new sources of revenue are not tapped, half of the City’s discretionary spending would have to be cut. At first, it seemed like the City was exaggerating the crisis, but now it looks like these estimates are real. (Unlike the State or Federal government, the City cannot borrow to meet its budget.)
The Mayor’s method for the massive service cuts was his alone, with no input from the supervisors, only some hearings after the fact. The Mayor is using a haphazard approach, cutting each Department’s budget in proportion to their share of the General Fund, so the biggest cuts were to human services and, most dramatically, the Health Dept The Health Department’s share of the General Fund is the largest, because the federal and state governments don’t give enough for health needs, so the balance has to come out of the General Fund.
Of the Mayor’s $150 million worth of Mid-Year cuts to this year’s budget, the Health Dept took the over 40% of the cuts. They included:
- closing of programs (e.g., a day treatment center at Laguna Honda where families could bring Alzheimer patients during the day so they could stay with their family members and night and their families could work; closure of part of trauma center at SFGH with forensic nurses who worked with rape and abuse patients, documenting their injuries and testifying in criminal cases, and determining treatment plans.
400 layoffs in the City’s Health Department alone, only 5 were management, so it’s people actually providing health care that are being laid off.
- de-skilling—placing regular clerks into Unit Clerk positions, who have to know medical procedures to route people, papers, and specimens to the right places.
- Healthy San Francisco: As the economy fails, more and more people need health care and this program, but the mayor has cut the programs and clinics people are sent to, so the waiting list is longer and longer so it’s almost impossible to get an appointment. It was three months before the mid-year cuts, now it’s more like six months. (Nurses in clinics have compared notes and estimate that each day, four dozen members of Healthy San Francisco are unable to get appointments when they call for them.)
- Homeless Programs: A drop-in center serving 300 people a day got their hours cut in half.
For next year’s 2009-2010 budget, The mayor has asked for another 12.5% in “baseline” cuts—from every department. It’s $144 million. These are cuts that will be made for sure. In addition, the mayor is asking departments to target another 12.5% in contingency cuts—to be used if his ideas for increasing revenues don’t pan out. Together, it’s $100 million from the Health Dept. alone. (The Health Department cuts are listed on a 74 page document on the Health Dept.’s website at sf.gov.)
The Mayor’s ideas for dealing with this shortfall are:
- One of these is his expectation that every labor union in San Francisco will give back its raises, to bring in $90 million
- The deep revenue losses have caused release of $49 million from the Rainy Day Fund.
- That leaves a budget deficit of $177 million—the size of the entire Sheriff’s Dept., including administration of jails.
The Mayor’s next ideas for increasing revenue are:
- getting rid of the cap on condo conversions and the lottery, so that anyone who wanted could convert to a condo by paying a fee of $10,000. The Tenants’ Union opposes this, and it probably would not pass a ballot election or pass the Board of Supervisors because it would displace tenants and reduce the stock of rental housing so badly.
- The mayor also wants to auction off all taxi medallions to the highest bidder, but this also is not likely to pass, based on past voting, or survive a court challenge.
The Coalition assumes these measures will not pass, we’ll still have the $177 million deficit, and that the mayor will make the second round of cuts, the contingency cuts, which is the second 12.5% cut, another $144 million City-wide, and another $50 million from the Health Department.
For the right-wing, this terrible budget deficit is an opportunity for them to force the changes in San Francisco that they’ve wanted for a long time: e.g., change from a tenant-based city to owner-based; change from working-class to affluent, and backing away from the commitment to provide health care for SF residents who need it. And the mid-year cuts have particularly target the agencies serving the poor that have stood up to the Mayor and to downtown. The mayor has also cut the agencies that the Supervisors have protected, so it’s also a battle of who has power in the City. From our standpoint, this is not a responsible, or even sane response to a serious crisis we’re in.
The people’s response to the mayor’s proposals has been centered around one goal: to try to protect the most vulnerable San Franciscans—while the mayor is trying to balance the budget on their backs.
One approach has been to try to move the budget decisions away from the mayor’s office into the legislative branch, the Supervisors, which now has input only at the very end. As it is now, the Mayor’s offices has more City resources as well as more delegated power, and more time to determine the budget.
One strategy of doing this was to develop a Supervisors’ “de-appropriation” ordinance,
to identify fat in the budget (heavy management, political appointees, inefficiencies, public relations staff, etc.). An example: the Police Department clocks over $1 million in overtime investigating right-of-ways at construction sites. This should be done by the Public Works Department at cheaper cost and in regular time. The Fire Department has inefficiencies. Plus the public relations staff in the Mayor’s office and each department.
We also want more equity in the cuts—lay-offs of equal percentages of management, and capping of salaries at $150,000). A very mild de-appropriation proposal was submitted to the Supervisors, but failed to pass. It happened right when the new board was elected, and they were probably not prepared to take on the Mayor at that point. We plan to keep indentifying this fat, So far, we’ve identified $70 million in alternative cuts. We’re going to keep pushing for future de-appropriations. The Supervisors need this tool to have any power in the budget process.
Our second strategy is to look at revenue measures and the June special election in particular. The unions, SEIU and the Central Labor Council, have done polling on various measures, and are a key player in this. If the Board of Supervisors unanimously passes the revenue measures, only a 50% majority is needed in a special election; otherwise it’s a two-thirds majority.
The mayor is vigorously opposing the June special election, in order to push his ideas and the more massive cuts. Revenue measure proposals include a sales tax which polls best, a vehicle licensing fees which requires state approval, a gross receipts tax which would hit downtown business and spare small business but doesn’t poll well, and allowing more money from the Rainy Day Fund to be released.
At this point in time, the Board is supporting the June election. They have until March 3rd to make up their minds. Some are feeling it would be good to delay the election slightly because people would understand how critical the situation is, but more programs would already be gone. Most of budget process is made in June, with decisions basically made by the end of June, and Supervisors’ votes at the beginning and again in the middle of July.
Ways to get involved:
- Every Monday at 5:30, the Coalition to Save Public Health meets at 17th and Kansas. All are welcome.
- On March 2 at 6 pm, a town hall meeting will be held at the Unitarian Center.