Time for serious budget reform - Page 2

It's time to quit with the patches, quit with the one-time solutions and fee hikes
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Well, one reason is the new police chief's crackdown on drug sales in the Tenderloin — which is packing the jails. "We're defiantly looking at a lot of new drug cases," Sheriff Mike Hennessey, who has had to open three new housing units to fit all the prisoners, told us. The crackdown may be good public policy (or not) — but there was never any discussion of how much it would cost. And the mayor and the chief never asked the supervisors to authorize adequate spending for it.

So as a matter of policy, the mayor apparently thinks it's worth $7 million to arrest drug dealers — but not worth $7 million to keep public-health workers who save lives every day on the job. That's a policy decision that was made arbitrarily — and that kind of discussion needs to happen on a dozen or more fronts.

The mayor told his department heads Nov. 19 to expect 20 percent cuts — and to prepare for as much as 30 percent. But that's not going to happen across the board. Unless the police stop arresting people, for example, the sheriff won't be able to cut 20 percent of his budget without letting prisoners go. The mayor won't take the political heat for cutting that much from cops and fire. So the burden will fall on public health, Muni, human services, recreation and parks, and other smaller departments. And the level of cuts will render those agencies unable to provide basic services.

So let's be honest: there is simply no way to close a deficit this large without new taxes. That's just reality, and anyone who denies it is refusing to face facts. San Francisco can't survive with basic services — like police, fire, and public health — intact on the amount of money the controller projects the city will collect in the next year.

Newsom will be guilty of destroying the entire social service infrastructure in this city if he refuses to push tax hikes. And he'll be damaging the local economy if he does it piecemeal.

We've been clamoring for years for an overhaul of the city's tax structure, and now there's a hurricane-force fiscal storm forcing the issue. If Newsom doesn't announce plans to hold open, public discussions and draft a new tax policy for the city (and we doubt that will happen) then the supervisors must act, now. Board President David Chiu already had a broad-based committee work on tax reform. Now the board needs to begin drafting comprehensive legislation to change the way the city collects money — with the aim of putting a measure on the ballot as early as possible next year.

The goal should be not only to bring in another $250 million (at least) in new revenue, but to shift the tax burden away from small businesses and the poor and middle class and onto the wealthy. A big first step: get rid of the flat business tax and replace it with a progressive gross receipts tax that charges the biggest companies a higher percentage. Other cities have found numerous other ways to raise money — such parcel taxes, which aren't quite as fair as ad valorem property taxes, but at least tax property owners, who in general are a wealthier class. A properly written utility users tax would hit big companies that use (and sometimes waste) a lot of power. And of course, a tax on income earned in the city — which would cover commuters who use city services but don't pay city taxes — is among the most progressive ways to bring in new money.

Meanwhile, let's remember: fee hikes (for Muni rides, for use of city pools and playing fields etc.) are just hidden taxes — on the poor and middle class.

State law makes it hard to raise taxes; any measure would have to go to the voters. But a major tax-reform overhaul that doesn't just raise a few taxes on a targeted group but makes the entire system more fair for everyone, ought to be a ballot-box winner — particularly if the mayor is willing to raise money and lead the battle to pass it.

In a Nov.

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