WHEN MAYOR GAVIN Newsom talks about $97 million in cuts to the city budget over the next 18 months, he's not just talking about abstract numbers. And he's not just talking about "waste and fraud" and "reorganizing departments" either. He's talking about the lives of people like Bill Schruba.

As Tali Woodward reports on page 18, Schruba is a 92-year-old retired painter who lives by himself in the Mission District. His health isn't great, and he's almost deaf, but he still takes care of himself, and he's doing surprisingly well – in part because of the help he gets from a public health nurse.

The nurses do home visits; they make sure patients like Schruba take their medicine on the right schedule, have enough to eat, and don't get socially isolated. They help teenage mothers learn how to breast-feed and what to do with a sick baby. They help mentally ill people navigate the bureaucracy of the city and state social service systems. They make it possible for a lot of people to stay out of the emergency room.

And under Newsom's proposed budget cuts, 22 of San Francisco's 36 public health nurses are about to lose their jobs.

And this same scene will be playing out all over the city as Newsom's cuts hit home.

The problem is, now that the voters have rejected two relatively modest tax measures, there isn't a whole lot of choice: some popular programs, and programs that serve vulnerable populations, are going to have to go. Everyone on the left and right who opposed these taxes (some with very valid concerns) needs to understand that: we didn't love the tax measures either, but we like the idea of eliminating Schruba's nursing care even less.

So over the next few weeks, as these cuts get discussed, and next year, as the new Board of Supervisors takes on Newsom's next budget, the supervisors are going to have to demonstrate both creativity and political courage. Because the only way to avoid a bloodbath here is to take on some powerful political constituencies.

And the problem won't go away after this year: it'll be almost impossible to pass any new tax measures next fall, when there will be little on the ballot to drive up turnout and when any tax proposal would need a two-thirds vote. So the next chance for a revenue-generating ballot measure is the fall of 2006.

The first thing the supervisors have to do is aggressively go after all the revenue they can get without going to the ballot. On the top of the list: Pacific Gas and Electric Co.'s franchise fee. By raising that fee to the level most other cities pay, San Francisco can bring in around $30 million a year – enough to save a lot of critical services.

There are other ways to bring in a few million dollars here and there. Sup. Aaron Peskin, for example, wants to add a $6-a-room charge for conventions at local hotels, which would bring in $5 million, and there are a few other subsidies to cut and fees to raise. But it won't add up to $97 million.

So the supervisors also need to have an honest discussion about some of the big-ticket items that have always been political sacred cows – and the first one is the San Francisco Fire Department. As we reported back in June (see "Where There's Smoke," 6/30/04), there's as much as $50 million in waste in that department – and this year's budget cuts very little of it. It won't be easy, though: already, the powerful firefighters union is running ad campaigns protesting the cuts – and a lot of neighborhood groups will howl if there's any talk (as there must be) of closing some fire stations. But when the stakes are this high, there's no room to be protecting wasteful practices.

Of course, the city wouldn't be in this situation if the mayor and the supervisors had acted several years ago to develop a local tax system that can bring in enough money to pay for what the city needs to do. So while they're fighting over this latest fiscal crisis, the supervisors need to be thinking about the long term. The next board president (who, by all accounts, is likely to be Peskin) needs to create a real, active, working committee to look at completely overhauling the city's tax laws. Many of the ways San Francisco raises revenue are regressive and counter to smart public policy. Small businesses and working-class residents pay too much. Many of the richest individuals and biggest corporations get away with paying very little at all. A comprehensive tax-reform package – one that closes loopholes, redistributes the burden, and brings in another $100 million or so a year in extra cash – absolutely has to be on the November 2006 ballot.

In the meantime, the supervisors need to move forward as quickly as possible on laying the groundwork for a local public power system. That alone could solve the city's budget problems, now and into the indefinite future. And every day PG&E remains in control is another day city officials are facing ugly, painful choices just to keep the local government alive.