Lee budget avoids cuts, but some say too few benefit from the boom


Mayor Ed Lee today released his proposed 2013-15 city budget in the Board of Supervisors Chambers at City Hall, a $7.9 billion spending plan that he said reflects the “San Francisco values of fiscal responsibility, social responsibility, and investment in our city’s future.”

It is the biggest budget in city history, divided almost equally between a $3.9 billion General Fund budget and self-supporting enterprises such as the airport and San Francisco Public Utilities Commission, and it has been buoyed by increasing tax revenues from the vibrant economy and progressive reforms such as a hike in the real estate transfer tax.

That latter tool for improving the city’s usually bleak budget picture was something Lee didn’t mention in his speech, focusing instead on his “strategic investments in job creation,” which have actually been a mixed fiscal bag given the tax breaks used to support them, such as the Mid-Market Payroll Tax Exclusion that Twitter and other tech firms have taken advantage of to avoid paying taxes on new hires.

Lee has used some of the improving revenue stream to avoid the cuts to social services that mayors have routinely proposed in recent years, which the supervisors then work to undo in a budget dance that has gotten tiresome for many of the players involved. “This year, I proposed a budget that protects our social safety net,” Lee said.

But some supervisors and social service providers say the mayor didn’t go far enough, and they say the improving fiscal situation should be used to restore some of the deep budget cuts made under Mayor Gavin Newsom’s administration, as well as to provide better services to the neighborhoods.

“There’s a lot more money in the budget, but it’s not being shared,” Sup. John Avalos told us. “People around San Francisco expect that if the budget is growing they’ll see tangible benefits.”

Avalos, a former budget chair who spearheaded the successful campaign to increase the city’s real estate transfer tax two years ago, said it appears that too much city spending is still focused around downtown. “All the people who opposed the increase in the real estate transfer tax will gladly spend the money,” he said.

Board President David Chiu echoed Avalos’ point that the benefits of this budget aren’t being broadly shared in a city with a rapidly rising cost of living. “We continue to hear about a lot of unmet needs with San Franciscans who are still struggling,” Chiu told us.

Reacting to a Guardian question about the supervisors’ comments, Lee told us, “Actually, I think it’s quite spread out,” but that he’s open to working with supervisors to ensure the needs of city residents are met. “There are going to be discussions about other things we could do,” he said during a press briefing outside his Room 200 office. “Each of [the supervisors] gave me their lists to take a look at and we couldn’t fund them all.”

Sup. Mark Farrell, who chairs the Budget & Finance Committee that will begin hashing out the final budget next week, told us, “The devil is in the details, and I’ll have some fun reading over the weekend, and then we’ll get to work.”

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