Solo budgeting - Page 2

Gavin Newsom attacks social services and other supervisorial spending priorities with unilateral cuts
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Chris Daly claimed the services being targeted for Newsom's midyear elimination are "a who's who of the board's priorities.... These are human and health services that the mayor has proposed be cut multiple times."

Daly's legislative aide, John Avalos, who is running for District 11 supervisor, notes that while Daly wanted $33 million for affordable housing, a onetime amount, the mayor took a budget surplus and used it for multiple years, with the police, firefighters', and nurses' contracts accounting for his biggest expenditures.

Asked why the city's deficit has ballooned by $144 million — from the $85.3 million the Controller and Budget Analyst's offices identified in March 2007 to the $229 million that Newsom's administration was suddenly projecting last fall — Tom DiSanto, budget and revenue manager for the Controller's Office, cites an extra $82 million in salaries and benefits.

These include the four-year contracts that nurses and police and fire departments secured last summer, along with five extra police academies, said DiSanto, who also listed $7 million in police crime laboratory debt service, $7.4 million for sheriff inmate housing (required by last year's Supreme Court order that prisoners can't sleep on floors), and the $29 million transit set-aside that voters approved last November when they passed Proposition A.

But as DiSanto explains, the city's budget problem is due not to lack of revenue but to baseline funding and rainy-day reserve requirements, not to mention the political process.

"Right now, with baselines and reserves, 96¢ out of every dollar goes into set-asides, and we're required to adopt a balanced budget," DiSanto said. "That's where the cuts come in. If we could access all the city's revenues, we wouldn't have a $229 million projected deficit," he added, noting that revenues are up, property taxes are higher than budgeted, and the hotel tax continues to be strong.

Ken Bruce, senior manager at the Budget Analyst's Office, notes that unlike the federal government, the city of San Francisco has to balance the budget. He also says the current deficit projection comes from the Controller's and the Mayor's offices, not the Budget Analyst's Office.

"In mid-March we get to do a joint forecast," Bruce told the Guardian. "It may paint a better picture, less of a doomsday scenario, but it still leaves us facing difficult policy choices. [The deficit] won't drop from $230 million to $100 million."

Peskin envisions several long-term solutions, hopefully including positive changes in the White House this fall.

"With every passing year, as the federal government has abandoned the cities, we've taken more of a burden, and labor and capital costs have increased," says Peskin, who is mulling changes to the real estate transfer tax and closing a loophole whereby lawyers and accountants in limited liability partnerships have escaped paying payroll taxes.

That said, Peskin sees no easy fixes in the city's upcoming budget hearings:

"It's a fluid situation, and it's all bad."