11/23/2009 12:21 pm ET Updated May 25, 2011

Under Pressure, Newsom Misfires at S.F. Budget

Gavin Newsom's Channel 5 interview last week revealed a Mayor defensive about his recent behavior, and it suggested he will lash out against critics by making vindictive budget moves. It's only November, but Newsom has already ordered every Department Head to propose 30% in cuts - alarming those who rely on City contracts to provide front-line services to the poor. At the same time, the Mayor and his spokesman both said they will avoid touching the Police and Fire Departments - neither of whom got cut this year, while Health and Human Services were slashed. Rather than react to another round of cuts, now is the time for progressives to step up and offer their solutions to a very real budget crisis. With Newsom not running for Governor, why does he still need five press secretaries - or his "pet projects"? And if the Mayor is really thinking about quitting politics (as the Wall Street Journal implied), why is he still sucking up to the Police and Firefighters Union - or the real estate lobby by pushing a dangerous proposal that will lead to mass evictions?

We've heard a lot in the past week that the City has a "$500 million deficit," which is both true and misleading. The Mayor's Budget Office estimates that we will be $522 million in the red by the end of the next fiscal year (June 30, 2011) - but right now, the Controller says we have an operating deficit of $53 million. To put things in perspective, the City plugged a $576 million deficit in June - but last December when the Mayor made mid-year cuts, we had an $118 million deficit. Not to say that the crisis isn't severe, but it is irresponsible for Newsom to throw this number around and talk about 30% cuts.

Already, the threat is scaring service providers - forcing them to prepare for another round of Beilenson Hearings, when they should be focusing on their jobs. On Friday, Human Services Director Trent Rhorer sent out a memo to all contractors - implementing a moratorium on all budget modifications due to the Mayor's request. Non-profits that serve the poor have already scheduled meetings on how to prepare for the cuts, and it's fair to say we are past the point of exasperation that the City threatens to cut our budget every year.

But not everyone has to worry about 30% in cuts. Newsom's spokesman said we will hold the line on the Police and Fire Departments. The Mayor was even more explicit, as he told the Examiner: "there are certain things that just won't be cut. I don't want people to think 'Oh my God, 20 percent of the fire stations are closing or 20 percent of the police officers are going to be laid off.' Some budgets will actually be bigger next year, not smaller."

To add insult to injury, Police and Fire got raises this year - when Health and Human Services got slashed. The Police budget grew by $13 million (the Mayor initially proposed $16 million, but the Board of Supervisors cut it down), and the Fire Department got an extra $2 million (down $6 million from what Newsom wanted.) Meanwhile, the General Fund cut $20 million out of the Human Services Agency - even after the Board saved 4 million in add-backs. The Mayor proposed $100 million in Health Department cuts, but only $12.5 million in programs were saved (not counting the Prop J's that were nixed.)

In fact, this was the first year that anyone can remember the Police Department getting more money from the General Fund than the Health Department. Moreover, state budget cuts from Arnold Schwarzenegger have almost exclusively hit Health and Human Services at the local level. With Sacramento facing a $20.7 billion deficit - and Republicans who hold the budget hostage in the state legislature would rather see California fall off a cliff than raise taxes - it will get worse.

Moreover, the Mayor made some budget decisions in the past five years when times were good that allowed the Police and Fire Departments to get bloated. As I reported on Friday, we had a huge spike in property tax revenue from 2005-2008 - because Downtown commercial buildings changed hands and got re-assessed. Now with the real estate slump, they are filing appeals under state law to lower their tax bill. But the City budget mushroomed during those years, and some will argue we were too dependent on this revenue stream.

Where did much of the money coming in from property taxes go? The Police budget grew by 46% - in part due to big union contracts that Newsom signed to get re-elected, and the Chief not civilianizing positions in the Department - despite a voter mandate. The Mayor also ignored warnings of a bloated Fire Department; we still have 38 Battalion Chiefs making over $160,000. The Retirement Package for cops and firefighters are a ticking time bomb that requires attention.

Newsom's City-funded campaign for Governor? The Mayor has five press secretaries, and Nathan Ballard's exit cries out the need to de-fund his position. Same with Kevin Ryan of the Mayor's Office of Criminal Justice. 311 and District Supervisors have rendered the Mayor"s Office of Neighborhood Services obsolete, and does the 311 Call Center need to stay open 24 hours a day?

Then, there's the Community Justice Center. Good people work there, and Jeff Adachi deserves credit for giving it a try by staffing it himself. But at times when programs that folks rely on to stay out of trouble are getting cut, it's hard to justify the Court as is. And we all know this was a chance for the Mayor to look good while running for Governor.

Gavin Newsom says our deficit is so bad, that "literally everything is on the table." But when pressed by the SF Appeal, the Mayor says he doesn't want tax increases. The only revenue solution Newsom supports is to speed up condo conversions, which the Supervisors "hate" - and for good reason.

First, from a fiscal perspective it is just a quick (and temporary) fix. We would get a little revenue now, but we'll be in the same posiiton next year. Second, it would decimate our rental housing stock - empowering real estate speculators to go on a rampage of Ellis Act evictions, knowing the City will allow these properties to convert into condominiums.

Mass condo conversions have been kicked around for decades. Whenever the City is in a fiscal crunch, those who stand to make millions sell it as a revenue option. It is wholly unacceptable, for it would make it impossible for many San Franciscans to stay here.

Newsom is under pressure to look engaged - now that everyone has criticized his conduct since dropping out of the Governor's race. He will use the budget to "prove" that he's back in the game - telling Willie Brown on Friday he's "looking forward" to tackling the $522 million deficit. And that should scare progressives. Newsom is bitter at his critics, and the power of the Mayor's Office gives him awesome power to trump the will of the Supervisors (and in a few cases, the voters.) Rather than react to his cuts, we have to propose our own.

Paul Hogarth is the Managing Editor of Beyond Chron, San Francisco's Alternative Online Daily, where this piece was first published.