Over the past several years the City has flourished. Tax revenues have increased substantially, as tourism and development has boomed, changing neighborhood character. The Mayor’s fiscal year (FY) 2015 budget of almost nine billion dollars is one billion dollars more than it was just two years ago.
In good times government programs and services aren’t as scrutinized during the budget process as they are in a recession or depression. It’s easy for public officials to look the other way when the City is flush with cash. Yet, the City faces an estimated $100 million deficit for FY 2016. Nearly half of this gap is due to pension cost increases. In 2011, voters approved Proposition C, a reform measure spearheaded by Mayor Edwin Lee, under pressure from Public Defender Jeff Adachi, which was supposed to resolve runaway pension costs. It didn’t. The assumptions behind the measure didn’t account for retirees living longer or lower investment returns.
The City has no game plan to address its budget challenges other than asking municipal departments to cut up to three percent of their budgets. A better approach would be for the City to implement a zero-base budget and start being accountable before the next bubble bursts. The San Francisco Board of Supervisors should immediately direct its Budget Analyst, Harvey Rose, to conduct a zero-base budget.
The City needs to cut administrative fat to ensure vital needs are met. Essential services and programs should be prioritized to ensure that they have sufficient funding. It’s just dumb to cut every department across the board, especially revenue generating ones. City operations should be analyzed and audited, including revenue practices, to insure all revenue sources are identified. Previous Grand Jury and Budget Analyst audit recommendations should be implemented, such as examining nonprofit agencies and City contracts to insure that services are being provided and to determine if they’re even necessary.
For example, the Healthy San Francisco Program (HSF) was designed by the Department of Public Health (DPH) in 2007 to make health care services available and affordable to uninsured San Franciscans. In FY2013, DPH estimated HSF expenditures at nearly $112 million, of which $29 million was covered by revenue and $83 million was paid for by the General Fund. With the adoption of Obama Care the amount necessary for HSF should have been dramatically reduced; it may even no longer be necessary.
Likewise, more than $200 million in tax revenue isn’t being appraised by the Assessor’s Office, including an unconstitutional loophole in the Presidio Trust that tax-exempts tenants, the non-assessment of AT&T Ballpark’s naming rights, and Pacific Gas and Electric Company’s under-taxed franchise fee.
The bottom line is that business as usual at City Hall has to change.
John Farrell is a former City Assistant Assessor-Budget/Special Projects, fifth generation San Franciscan, and Westside resident.