What went wrong

The Republicans had all the power: they could block any budget deal, they refused to raise any taxes, and they don't really care if the state goes bankrupt
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EDITORIAL David Dayen, a political blogger at Calitics, had the best line on the California budget crisis.

"Whoever cares the least about the outcome wins," he wrote July 20. "If you don't care whether children get health care, whether the elderly, blind and disabled die in their homes, whether prisoners rot in modified Public Storage units, whether students get educated ... you have a very good chance of getting a budget that reflects that."

In the end, the Republicans largely carried the day because they had all the power: they could block any budget deal, they refused to raise any taxes, and they don't really care if the state goes bankrupt. In fact, Gov. Schwarzenegger was happy to draw the crisis out as long as necessary — it helped his poll rating.

San Francisco should have had a very different situation and a very different outcome. The progressives control the Board of Supervisors and the mayor is in a tight spot — he's running for governor and wants to show that he can manage San Francisco better than anyone in Sacramento is managing the state. It's part of his campaign theme. A prolonged budget standoff was not in his interest.

And while the city budget is far, far better than the state budget, and the progressives managed to get a few concessions, the bottom line remains: this is a no-new-taxes budget, balanced largely with cuts and regressive new fees. In fact, for all the mayor's talk of working with the board on possible tax measures, it now appears likely that there will be no revenue proposals whatsoever on the November ballot.

And the mayor is going to make another deep round of cuts soon, when the figures on what San Francisco will lose in state funding (almost certainly more than $150 million) become available.

It took last-minute efforts by Sup. Ross Mirkarimi, supported by Sup. David Campos, to win back funding for the Public Defender's Office and at least a shot at funding the public finance system for the next local elections.

The supervisors, frankly, should have pushed harder. The message to Newsom should have been: no budget without new revenue. And as the board approaches the next fiscal year — projections already call for a $300 million deficit — that absolutely has to be the bottom line. Critical services have been cut too deeply already.

The process needs to be better too. Allowing two supervisors — the budget committee chair and the board president — to negotiate a closed-door deal with the mayor without briefing their colleagues or letting the other stakeholders know what was going on was a big mistake that can't be repeated.

The New York Times ran a front-page story July 21 describing in bleak terms how California has abandoned its safety net and given up the ambitious dreams that for so long defined the state. "At no point in modern history," reporter Jennifer Steinhauer wrote, "has the state dealt with its fiscal issues by retreating so deeply in its services, beginning this spring with a round of multibillion-dollar budget cuts and continuing with, in total, some $30 billion in cuts over two fiscal years to schools, colleges, health care, welfare, corrections, recreation and more.

That can't be the model for San Francisco to follow. *

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