Editorial: Put new taxes in the budget

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Mayor Gavin Newsom still wants to balance this year's municipal budget with no new taxes (although he's happy to raise the fees to use city facilities). The supervisors are looking at a different approach: John Avalos, chair of the budget committee, told us he'd like to see $100 million in new revenue on the table.

Some of that might come from a fee on liquor sales. There's a hotel tax measure being circulated, and the supervisors are also looking at a raising the real estate transfer tax on high-end properties and imposing a commercial rent tax. All but the liquor fee would require a majority vote on the November ballot.

So far, Newsom hasn't given any indication that he'll support any new taxes — and that's due in significant part to his campaign for lieutenant governor. The mayor doesn't want to get hit by his Republican opponent as a tax-and-spend liberal, so he's holding the line, cutting essential services instead of looking for progressive ways to bring in new revenue.

But voters up and down the state have shown their willingness to approve new taxes to save essential services, and it's likely that San Franciscans will do the same — particularly if the folks at City Hall are united in their support.

So here's an idea for the supervisors: why not include that new revenue as part of this year's budget?

There's no legal reason the budget can't be balanced in part on the assumption of new income. November is almost halfway through the fiscal year, but more than $50 million of that revenue would be available for the 2010-11 budget.

There are distinct advantages to including that money in the budget, starting with fewer budget cuts and layoffs now. There's also a clear political advantage: if the voters realize what's at stake — that the money has already been earmarked and that voting it down would mean immediate reduction in vital services — the message of the importance of approving the tax measures would be even stronger.

Equally important, it would force the mayor to show his hand. Newsom would almost certainly prefer to duck the issue, to take a neutral stand on the tax measures ("let the voters decide"). He might wind up opposing all of them. But if the money's already in the budget, what can he do? Without that tax money, the budget won't be legally balanced. Without his support, that tax money might not come through.

It's a risky move. If the voters reject the tax hikes, the supervisors and the mayor would be forced to make painful midyear cuts. But they'll have to make those cuts anyway, either now or in November. And once you shut down services or eliminate nonprofit contracts, it's much harder and more expensive to start them up again.

So this might be the year to take the calculated gamble: assume that money's going to be there. Then everyone, including the mayor, can help make sure that it actually is.