THE BOARD OF Supervisors' Budget Committee wrapped up its review of Mayor Gavin Newsom's 2004-2005 budget proposal last week without a clear indication that the supervisors would seek to substantially change the document. Now the full board gets the committee's report – and while it's hard for 11 supervisors to tear up and rewrite a giant $5 billion budget document, there are some significant changes the board needs to make before approving the new mayor's first fiscal blueprint.

While Newsom has been playing down the bloodletting, there are some substantial cuts in the budget – in everything from public health to parks to arts funding to Muni – and there's a long list of "reorganizations" that will inevitably lead to cuts as well. But there's plenty of fat still sitting on the table – and there are long- and short-term revenue sources that haven't been tapped. There's also some really bad public policy the supervisors need to change.

We've said it before, and we'll keep on saying it: San Francisco is a rich city, and there's plenty of money out there to cover basic city needs. But the revenue package Newsom has put forward is still very limited. There is, for example, no commercial-occupancy tax, no city income tax, no local vehicle-license fee, no new real estate transfer tax – and no attempt whatsoever to force Pacific Gas and Electric Co., which has been stealing billions of dollars from the city, to pay some of that money back. There are two obvious money sources the supervisors need to move on: An increase in PG&E's franchise fee (set back in the 1930s and now at a rate far lower than most California cities') would immediately bring in tens of millions of dollars . And in tight times like these, it's criminal not to aggressively pursue public power – almost certainly the single largest source of new revenue the city will ever see. The board needs to raise the franchise fee to the top level allowed by state law and fully fund the Local Agency Formation Commission's next study on municipal lower.

The largest source of budgetary waste may well be the fire department (see "Burning Cash," 6/30/04), but it's not taking a significant budget hit. Before the supervisors put the axe to public health and Muni, they ought to be squeezing every ounce of lard they can out of the bloated public safety budgets.

Then there are the bad precedents this budget sets. For starters, Newsom is trying to balance the books in part by selling off surplus city property. That's a terrible idea: once public property is sold, it's gone forever. Besides, it's official city policy to use surplus property to house the homeless – not to raise onetime quick-and-easy cash. Then there's privatization, which Newsom calls "contracting out" – another horrible idea. Private contractors typically do a worse job at a higher cost; check out, for example, the Bechtel contract with the San Francisco Public Utilities Commission.

The district-elected board needs to show its independence here; approving Newsom's budget without some real, substantive changes would be a serious mistake.