Nobody really thinks the state budget deal is going to hold, and nobody really thinks San Francisco's budget deficit is actually closed. So while the Legislature is in recess and the supervisors are moving on to other things, it's worth thinking about what the next few months will bring. It won't be pretty.
Paul Hogarth, writing for the online publication BeyondChron, pointed out Aug. 6 that San Francisco will lose more money due to state budget cuts than the city will gain from federal stimulus spending. The numbers are complicated and fluid (San Francisco will lose $100 million that the state will "borrow," but the city can immediately go to the bond market and borrow against the state debt with any luck at the same interest rate the state will pay the city, so that should be a wash. Should unless the lenders don't want to gamble on the state's debt.) But no matter how you slice it, San Francisco will be out something on the order of $18 million in state cuts alone.
There's also the fact that nobody knows what the economy will do over the next six months. If employment doesn't pick up, and consumer sales don't pick up, and enough businesses get away with demanding property tax reductions, the revenue numbers projected by the Newsom administration will be wrong and things will be even worse. Sup. Ross Mirkarimi, who's on the Budget Committee, told me he's expecting at least $100 million in red ink for next year's budget, and some of that will start to show up this fall.
I can't even imagine what the 2010-11 budget will look like. By the time budget hearings begin next June, Gavin Newsom will either have won the Democratic primary for governor, and will have entirely checked out of City Hall, or he will have lost and will be angry, bitter, and vengeful.
We were mildly critical of Budget Committee Chair John Avalos this summer; he cut a deal with Newsom that requires the supervisors to believe that the mayor will work with them on any midyear cuts. The problem is that Newsom can't be trusted. He's already broken parts of this budget deal. So when, as is almost certain, he breaks his promise to work with the board on midyear cuts, the supervisors will have to take a much more aggressive stance than they did this summer.
Newsom will be in the middle of a heated race for governor he won't want to cut cops or firefighters, and he won't even talk about taxes. (Although a recent Gallup Poll shows that only 46 percent of Americans think their taxes are too high, the lowest number to hold that view since 1961.)
It's going to be war, and the progressives on the board need to be ready for it or they're going to get rolled, again. *