Shrinking Government: Newsom’s budget cuts public health and city employees — includes no new taxes.

SF Bay Guardian, June 3, 2009

Shrinking government

Newsom’s budget cuts public health and city employees — and includes no new taxes

By Steven T. Jones

Mayor Gavin Newsom released his proposed 2009-10 city budget June 1, proclaiming it far better than doomsayers predicted and emphasizing how he minimized cuts to health and human services that he once said could be as deep as 25 percent in order to bridge a $438 million budget deficit.

“It doesn’t come close to balancing on the backs of our health and human services agencies, as some had feared,” Newsom told the department heads, elected supervisors, and journalists who were tightly packed into his office for the announcement event.

But there’s still plenty of pain in a city budget where the General Fund — the portion of the budget local officials can control — would be reduced by more than 11 percent, its only reduction in recent memory. And at a time when every reasonable Democrat in Sacramento has been nearly begging for tax hikes to prevent budget blood, San Francisco’s Democratic mayor proudly proclaimed that there are no new taxes in the budget.

“We didn’t raise taxes, and we didn’t borrow,” he said. You can almost hear that line being repeated in the ads he’ll be running as he campaigns for governor.

Newsom proposes slashing the city’s public health budget by $128.4 million, or 8 percent (a total of 400 employees), while the human services budget would take a $15.9 million hit, or 2 percent. “That’s a lot, but by no means is it devastating,” Newsom said, noting that he restored some of the deepest cuts that were the subject of alarming public hearings. “I listened to the public comments at the Board of Supervisors… Things got a lot better than the headlines and the hearings.”

The proposed budget includes 1,603 full-time-equivalent layoffs, or a 5.8 reduction in the city’s workforce, trimming more than $75.5 million from the general fund budget. In addition, the Department of Health and Human Services is cutting back its workweek to 37.5 hours to further trim costs.

“The smoke hasn’t cleared yet and there’s a lot of devastation in this budget that isn’t being talked about,” Sup. John Avalos, who chairs the Board of Supervisors Budget Committee, said at the event. Newsom’s budget will be analyzed and then face its first committee hearing June 17, with approval by the full board required by July 31.

“The mayor told us a lot about what’s in the budget, but not a lot about what’s not in the budget, so we’ll spend a few days figuring that out,” board President David Chiu told the Guardian.

The budget was aided greatly by more than $80 million in federal stimulus funds and other one-time revenue sources (such as $10 million from the sale of city-owned energy turbines) that were used to plug this year’s gap and offset cuts by the state and depressed tax revenue.

Although Newsom doesn’t want to raise taxes, licenses and fees would go up 41 percent, increasing revenue by $64 million to $220 million. Some of those proposed fee hikes range from the cost of parking in city-owned garages to admission fees for city-owned facilities such as the Strybing Arboretum. Muni riders will also see fares hiked to $2.

There will also be deep cuts to some key city functions. The Department of Emergency Management would take a 24 percent cut under the mayor’s plan, while the Department of Building Inspection faces a 20 percent cut to expenditures and a 29 percent reduction in staff.

The Planning Department would also take a hit of about 7 percent, with most of that focused on the department’s long-range planning functions, which were slashed by 19 percent to $4.7 million.

But it’s not an entirely austere budget. The police and fire departments have status quo budgets with no layoffs. Travel expenses would increase 13.5 percent to $2.9 million and the cost of food purchased by the city would rise 127 percent to $7 million.

The Mayor’s Office of Economic and Workforce Development — which often uses public funds to subsidize private sector projects — would get a 32 percent increase, to $24.7 million.

It’s unclear how much the Mayor’s Office has shared the budget pain. During the presentation, Newsom said his office’s budget has been cut by 28 percent, but he later clarified that was spread over the five years he has been mayor. Yet even that is tough to account for given that some functions have been shuffled to other departments.

The document shows a proposed 60 percent increase in the Mayor’s Office budget, although the lion’s share of that comes from the Mayor’s Office of Housing’s one-time financial support for some long-awaited projects, including rebuilding the Hunters View housing and support services project for low-income people connected to the Central YMCA, and an apartment project on 29th Avenue for people with disabilities.

Avalos has said he will look to find money by cutting some of the highly paid policy czars and communications specialists added to the Mayor’s Office in recent years, as well as Newsom’s cherished 311 call center and the Community Justice Court he created. Supervisors are also expected to resist Newsom’s penchant for privatization. Newsom proposed to privatize seven city functions, from jail health services and security guards and city-owned facilities, and to consolidate another 14 functions between various city departments.

Newsom pledged to work with supervisors who want to change the budget, continuing the rhetoric of cooperation that he opened the budget season with in January, which supervisors say hasn’t been matched by his actions or the secretive nature of this budget. “This budget is by no means done,” Newsom said. “It’s an ongoing process.”

In fact, Newsom warned that the budget news could be even worse than his budget outlines. Gov. Arnold Schwarzenegger is talking about new cuts that could total $175 million or more for San Francisco only, although Newsom only included $25 million of that in his budget because it went to the printer on May 22 and the total hit is still unclear. “So,” Newsom said, “we’re by no means out of the woods.”

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